Discuss the concept of 'weaponised interdependence' with reference to India's exposure to extraterritorial sanctions regimes. Suggest institutional reforms for a coordinated national response.

'Weaponised interdependence' describes how states controlling critical global networks — dollar clearing, marine insurance, shipping lanes — convert others' dependence into coercive leverage. India's Iran-linked energy and connectivity ties show how extraterritorial sanctions can throttle sovereign policy choices without touching Indian jurisdiction.

How interdependence is weaponised against India

• Financial chokepoint: Secondary sanctions work by threatening a firm's access to US dollar-clearing banks, not by direct jurisdiction. Parliament has repeatedly been asked about US sanctions on India-based companies trading in Iranian petroleum, and about US advisories against doing business with Iran [1][2].
• Permission-slip dependence: The US exemption for Chabahar Port was revoked with effect from 29 September 2025; comfort was restored only through a US Treasury communication of 28 October 2025, valid until 26 April 2026 [3]. A flagship project thus sat without written cover for nearly a month, and its protection is renewed at another government's discretion.
• Logistics and energy chokepoints: India's stake in Chabahar and the INSTC corridor depends on banking, shipping and insurance links it does not own [4]; maritime chokepoints near the Gulf compound exposure for an import-dependent economy.
• Limits of existing hedges: RBI's Special Rupee Vostro Account framework enables rupee-invoiced trade, but account-opening is itself subject to sanctioned-entity screening and the FATF high-risk list [5] — the very trade needing the workaround is what the rule tells banks to avoid.

Institutional reforms needed

• A standing nodal sanctions desk under the Cabinet Secretariat, tracking every listing from notice to end-use impact, since responsibility today is split across MEA, Finance/RBI, Commerce, Shipping and Petroleum.
• RBI/Finance: a written rule-book telling banks how to treat a listed Indian client, preventing pre-emptive de-risking.
• MEA: convert one-off waivers into a calendared renewal channel sought before expiry.
• Shipping and Petroleum: build domestic marine insurance–reinsurance capacity and pre-cleared alternate supply contracts.

Sanctions cannot be vetoed, but the window of exposure can be shortened. Institutionalising speed — one desk, one rule-book, one renewal calendar — converts strategic autonomy from a declaration into an operational capability, safeguarding India's energy security and legitimate trade interests.