Almost a hundred years ago, a science fiction book When Worlds Collide and its many spinoffs discussed an escapist fantasy – fleeing a disaster by moving to another world.
Some people may be forgiven for wanting to do so now.
2026 is the year when unresolved tensions come to a head. Trade disputes, geopolitical conflicts, and AI are no longer parallel storylines but mutually interacting systems. The implications for India, the US and the world cut wide and deep. Predictions that will come true by Dec 31, 2026 follow.
VENEZUELA
In 2025, Donald Trump reshaped global relationships. 2026, with the Venezuela attack, promises more of the same. Trump’s tariffs were designed to project strength but instead exposed the limits of America’s power. If the US can get control of Venezuela’s oil reserves (the largest in the world), without the chaos that followed Iraq, 2026 will be different. However, it takes hours to break a regime but years to rebuild such that people see the benefits. Probability of failure in Venezuela is 75%.
TARIFFS
With the US Supreme Court poised to invalidate tariffs (75%), Trump needs a win that people can feel in their wallets or he can kiss the crucial midterm elections bye-bye (over 75%). Trump may still resign on a high after November for scandal, health or other reasons (75%). Beyond that, the real question for 2026 is not who will win or lose, but who will emerge as the heroes. Will it be the AI pioneers – or the mad AI scientists? And who are the villains? A rising China that rattles sabres around Taiwan without firing a shot? Or it is us?
For India, the tariffs and visa restrictions continue, although its 8.2% growth shows that it is adjusting rapidly. If India shifts to buying more American/Venezuelan oil, the Russia-Ukraine war will end in a stalemated ceasefire (50%). Probability that such a face-saving way will cause tariffs to drop: 75%.
INDIA-EU
The India–EU trade track, by contrast, remains bogged down in regulations. Europe’s Carbon Border Adjustment Mechanism (CBAM) complicates any near-term breakthrough. An understanding between two hard-headed bureaucracies does not bode well for an agreement. Prediction for success: 25%.
INDIA-PAK
The India–Pakistan dyad is more precarious. Pakistan requested the ceasefire but the public loss of the Rafales dominated the narrative. India is waiting for the right provocation to get its revenge. It must also address its exposed aircraft and drone weaknesses but act before Pakistan cements its new-found international status. So, probability of Operation Sindoor II: 50%.
AND LAST BUT NOT THE LEAST, AI
Hovering over all of this is AI, which is quietly becoming the most consequential variable of all. The United States retains leadership in frontier AI models, but China is narrowing the gap through state-directed investment. This is no longer just an innovation race; it is a geopolitical one, with AI shaping military planning, economic productivity, and surveillance capacity. However, AI needs a lot of resources, including water. The probability that someone in an economically depressed area will die from lack of water that went to feed a neighbourhood AI data centre: 75%.
India’s AI story is different but potentially more consequential in the long run. While unlikely to dominate frontier model development, it is exceptionally well-positioned to become the world’s largest AI deployment, integration, and services hub. With a vast digital workforce and lower near-term job displacement risk, AI could add $1–1.5 trillion to India’s GDP by around 2030. The probability that this will come true by Dec 31, 2030: 75%. The shape of 2026
CONCLUSIONS
With AI, decisions that once unfolded over decades are now occurring over years. This compression raises the cost of mistakes but increases the benefits of planning. America’s market-led rules, European risk regulation, and China’s state-centric model are pulling the world in different directions but could all be part of the solution. While none of these issues will resolve cleanly, tariffs may fall, but trade friction will persist. Wars may freeze, but not fully end. AI will boost productivity but magnify inequality. The question for 2026 is whether it manages this convergence without tipping into collision. Since Venezuela has already occurred, probability of no wars in 2026: 0%
The good news? Macroeconomic Indicators! So 2026 is less an endpoint than a stress test of institutions. At a macroeconomic level, Trump’s actions have actually led to a boost in America’s and India’s GDPs, and a $1T surplus for China. This implies that the worst of the pessimistic prognostications will be wrong. The new dispensation will be dominated by China and the US, along with a smaller poles like Russia, India, Brazil, other BRICS and a neutral EU/Canada. However, the losers, like the UK after 1950, will allow a peaceful transition because they will still stand to gain. Probability of a peaceful Convergence rather than Collision: 75%.
What do you think? Let us know.
Read more: What 2025 revealed about Indian-Australians
