Sustaining multilateralism when the US steps back
In recent times, global governance has become increasingly vulnerable to domestic political cycles in major powers. The decision by the United States, under President Trump to withdraw from over 60 international institutions or the U.S. decision to initiate a second withdrawal from the Paris Agreement, which will become effective in January 2026 is more than just a diplomatic recalibration. US funding withdrawals and delays, after Trump’s re-election have affected global health coordination through the World Health Organisation, where the U.S. accounted for an estimated 10-15% of the budget. Washington has additionally exited the UN Human Rights Council, while development interventions across parts of Africa have faced uncertainty. Taken together, these developments point to a much broader transformation in the multilateral order. It is a signal of a deeper shift towards transactional nationalism where the collective problem solving is subordinated to short term political calculus.
The significance lies less in the retreat itself, but what it reveals about international cooperation. Cooperation, however, is not collapsing. It is being recalibrated, shaped less by shared commitments and more by selective participation. However, multilateralism must remain functional and effective even when participation is politically contingent.
Multilateral institutions despite their imperfections, remain among the few mechanisms capable of coordinating collective responses to global challenges. Global problems these institutions set out to diminish have become more complex, more interconnected and more uneven in their impact. Climate change, energy transition, public health, and development finance are classic examples of global challenges. These are problems that no country, however powerful, can solve alone. However, when institutions weaken, the costs are not evenly distributed. They often fall disproportionately on developing economies that are exposed to climate shocks, capital volatility and technology barriers. Thus, making cooperation more indispensable and valuable.
Globally, according to United Nations Environment Programme estimates a climate finance gap of over $4trillion by 2030 for developing counties. The economic asymmetry in a global world also explains why multilateral cooperation continues to matter materially. Multilateral development banks alone disburse more than $200 billion annually. Even BRICS’s New Development Bank has greenlit a $35 billion fund for infrastructure development. They function less as diplomatic forums and more as mechanisms of economic risk management as they can pool capital, manage risk and provide predictability in an increasingly volatile global economy.
The retreat of a major power often changes the plot. However, the temptation to frame this moment as a “power vacuum” that is waiting to be filled would be misguided. Even China’s growing footprint as a leading contributor to several UN development programmes through competitive institutional dominance is no alternative. The current moment is less about succession and more about sustainability. In such a landscape, the durability of multilateral cooperation progressively depends on countries willing to invest in institutions without seeking dominance or replacement leadership.
It is in this context that the role of middle and emerging economies becomes relevant. They are not replacements for hegemonic leadership, but stabilisers of cooperation. According to the IMF, over 60% of global growth this decade is expected to come from the Global South. However, these are also nations under stress to develop in a new world of climate vulnerabilities and energy transition. India’s experience helps illustrate how emerging economies respond when multilateralism is under strain rather than collapse. According to the Global Climate Risk Index, the nation consistently ranks among the world’s ten most climate vulnerable nation. Estimates also suggest that climate-related disruptions already cost India approximately between 2 and 3 percent of GDP annually through lost productivity, damaged infrastructure and agricultural stress. These vulnerabilities make multilateral cooperation less a matter of principle and more a matter of self-interest.
If multilateralism is adapting rather than ending, its evolution is most visible in issue-based coalitions that prioritise delivery over unanimity. The International Solar Alliance (ISA), headquartered in India, would offer a revealing test case. The more than 100-member country alliance reflects both ambition and practical possibility. The decision of the US to step away from the ISA matters not only for symbolic reasons but for what it implies in terms of finance, technological partnerships and global signalling. The distinction here is important because it shifts the focus from who participates to what the institution delivers. Rather than undermining the alliance, the exit underscores why platforms anchored in developing country priorities must endure beyond the political cycles of any single power. Its relevance was never contingent on universal participation. It is dependent on its ability to mobilise finance, scale deployment and lower transition costs.
The opportunity here is more interesting. If India can pivot the alliance decisively towards delivery by crowding in private capital, engaging multilateral and regional development banks, and experience accelerating implementation, the ISA would emerge more credible. Success of this magnitude would carry significance beyond solar energy. It would signal that effective cooperation does not require unanimity, but it does require consistency. The broader global context makes this role more consequential. The success of ISA would also demonstrate multilateral cooperation can still function effectively in a fragmented global order. India’s value proposition, then, is not ideological leadership but predictability.
The US retreat from global institutions is not a catastrophe. It is an opportunity to demonstrate how an international system adapts. It is also an opportunity for countries like India not to lead loudly but steadily. Fundamentally, it is an opportunity to keep global cooperation intact at a time when it is under strain. The future of multilateralism will ultimately be shaped not by who exited, but by who stayed, adopted and delivered.
The article was published with Business World.
