The Sanction Economy: How Global Politics Redraws Investment Maps

The umbrella of global politics covers a lot more today. Spreadsheets, SWIFT messages and ….sanctions! All are a part of it . 

One decision in Washington made a lot of Mumbai go unusually quiet. 

This is something happening everywhere today. 

The latest action? Sanctions imposed by Washington on Indian companies involved in buying Russian oil. The timing couldn't be more perfect: India is establishing itself as the new global manufacturing hub and an energy link between the East and the West.

And the irony? Every sanction is attempting to redraw the map. The Global South adapting, new currencies joining in, and eventually the oil to keep flowing, just through quieter ports.

Would it be far fetched to say - sanctions are considered today the first step or first attempt towards a new economic order? 

Maybe not.

Round 1: The New “War Without Weapons”

In recent months, the U.S. announced sanctions that have an impact on Indian energy companies. Simply owing to the fact that these companies dealt with Russian oil traders.

Result ? 

A $300 million dividend got stuck. A few private refineries quietly paused fresh contracts. Banks are triple-checking compliance memos instead of clearing payments.

No missiles fired. Just emails and legal notices  and the economic battlefield has shifted. 

Sanctions are coming as silent financial weapons. We don’t hear them explode, but you can definitely see the smoke in the quarterly reports.

Round 2: How Did We Reach Here?

Money is a network.

The U.S. Dollar controls the fuels trade, debt, and insurance.

Russia sells oil and gets paid in U.S. dollars, which eventually move through American banks. That gives the U.S. financial system access to the records, even from miles away.

Similarly, when India buys oil through indirect channels, some payments still pass through those very same channels. There is seldom an option to avoid or bypass these systems. 

Thus the US ensures that overall India feels the heat. They slow down the speed of our economically critical transactions and shackle us with tighter scrutiny. 

Once again, this reiterates the fact that the global financial system is an extremely complex interconnected web that impacts “you” in a myriad of ways. 

Round 3: Every Action Has a Currency Conversion

Like I mentioned earlier, sanctions are practically redrawing investment maps/ routes. 

Investors naturally now ask: If a deal can be sanctioned tomorrow, should I fund it today?

Venture funds hold back investments. Banks add new compliance costs. Insurance premiums rise.

Remember, capital always flows towards stability and sanctions are considered the exact opposite of stability.

Round 4: The Indian Balancing Act

Let’s give credit where it’s due.

India’s global geopolitics has evolved since our freedom. We have staunchly advocated for the idea of building a multi-polar world. 

As tensions rise and fall, we have managed to remain an independent act that balances strategic partnerships with good intent and maturity. 

We continue to buy oil from Russia. Build strategic partnerships with the USA. Tackle China on the border issues. Foster warm, friendly ties with the Middle East. 

Grow trade with Europe. And still remain the fastest-growing G20 economy.

The recent six-month U.S. exemption on the Chabahar port project shows that even Washington knows that India is too important to isolate.

Round 5: Sanctions or Signals?

It would be wrong to view sanctions only as a punishment or restriction.

Sanctions are trying to convey something to us (indirectly)

Sometimes they say “we disapprove.” Sometimes they say “we still need you.”

Sometimes they say “Listen to us” 

With each sanction, every country is trying to negotiate , with subtle hints. And it is the policymakers trying to decode.. 

That’s why the smarter countries (and India is definitely among them) view sanctions not as setbacks, rather as feedback.

Round 6: Rewriting the Investment Playbook

There are also certain other movements, happening quietly in the background:

1. Diversified Payment Paths – More push towards trade in INR and AED than ever before.
2. Strategic Friendships – Japan, UAE, and France emerging as reliable capital partners.
3. Compliance Becoming an Industry – Start-ups now specialise in sanction-risk monitoring.
4. Energy Independence = Investment Independence – Solar, green hydrogen, rare-earth mining, all are becoming strategic.

So yes, even if sanctions cause some bottlenecks, they in a way are also pushing towards innovation in money flows. 

Round 7: The World Learns Its Own Lesson

Today the US stands watching quietly as other countries build alternate payment systems.

The same Europe that led sanction rounds on Russia now fears losing market access in Asia.

And the same India that once relied on Western capital is now becoming a magnet for Middle-Eastern and East-Asian investors.

Call it irony. Call it evolution. Either way, it’s economics with a sense of humour.

Final Word

So what is a country's true strength today?

Controlling flow of money ? Calmly handling the disruption in trade ? Or anything else….?

I will say : All of it 

Today, 

Sanctions will continue. Politics will change. Currencies will realign.

But nations which stay composed, diversify wisely, maintain relations and build credibility will always attract capital , no matter who’s sanctioning whom.

Because today trust is the ultimate currency. And India, fortunately, is still one of the few places where both are growing.

Disclaimer:
Mandar Shrikant Joshi is a guest author. The views, opinions, and analyses expressed in this article are solely his own and do not necessarily reflect those of TICE News or its editorial team.