The War Reaches the Workshop: Geopolitics on India’s Factory Floors

Geopolitics is usually discussed in the language of summits and superpowers, as if it were a game played far above the heads of ordinary businesses. Walk through Surat, however, and the abstraction collapses. Nine out of ten diamonds in the world are cut and polished in this one Gujarati city, and a large share of the rough stones historically came from Russian mines. When the G7 moved to sanction Russian-origin diamonds after the invasion of Ukraine, the decision was made in Brussels and Washington — but the consequences arrived in Surat’s polishing units, where lakhs of workers depend on a steady flow of rough stones. Orders thinned, units cut shifts, and karigars who had never read a foreign policy document discovered they were living inside one.

This is the truth the theme of geopolitics and business must confront: political decisions do not only shape multinationals with risk departments and lobbyists. They land hardest on the small and mid-sized firms that form the spine of economies like India’s — businesses with no hedging strategies, no alternative suppliers on retainer, and no cushion to absorb a bad year.

The Red Sea crisis made the point again. When Houthi attacks on commercial shipping forced vessels to abandon the Suez route and sail around the Cape of Good Hope, freight costs surged and voyages lengthened by weeks. For a large corporation this is a line item; for a ceramic tile exporter in Morbi or a garment manufacturer in Tiruppur working on thin margins and tight delivery windows, it is the difference between profit and loss. Some buyers shifted orders to suppliers closer to Europe. A missile fired in one geography quietly rewrote purchase orders in another.

The war in Ukraine delivered a similar lesson through the kitchen. India imported the bulk of its sunflower oil from Ukraine and Russia; when the Black Sea closed, edible oil prices jumped, squeezing every food processor, restaurant and household. Fertiliser supplies wobbled, and the government’s import bill swelled. Conversely, the same war handed Indian refiners a windfall — discounted Russian crude turned India into a major exporter of refined fuels. Geopolitics rarely distributes its consequences evenly; it creates losers and winners on the same street, sometimes in the same industry.

What should businesses take from this? First, that supply chains are now political documents. Knowing where your inputs originate — and where your customer’s customers sit — is no longer procurement trivia but survival knowledge. Second, that concentration is fragility. Surat’s genius at polishing became a vulnerability because it was tied to one source of rough stones; diversification, once dismissed as inefficiency, is insurance. Third, that government policy is a market force. An export ban on rice, a tariff shift, a free trade agreement with the UAE or Australia — each redraws the map of opportunity faster than any competitor can.

For India, the stakes cut both ways. The same turbulence that batters its small exporters also pushes global buyers to seek alternatives to China, opening doors for Indian manufacturing. Whether Morbi, Tiruppur and Surat capture that opportunity depends on how quickly firms learn to read the world, not just their order books.

The old assumption was that only diplomats needed to understand geopolitics. The new reality is that a workshop owner in Gujarat may feel a European sanction before a Delhi think tank finishes analysing it. Power politics has become a business input, as real as labour or capital. The firms that endure will be those that treat the morning’s world news not as background noise, but as the first commercial document of the day.