IS INDIA PREPARED FOR THE END OF GLOBALISATION?

NEWS: The article argues that the era of liberal, cooperative globalisation is over, and the world is moving towards mercantilism, protectionism, and power-based politics. India is not fully prepared for this shift

Globalisation

It refers to the growing interconnectedness of economies, cultures, and populations across borders, driven by trade, investment, technology, and movement of people.

Meaning of the “end of globalisation”

Globalisation was based on:

• Free trade of goods & services
• Free flow of capital (but not people)
• Global supply chains
• Multilateral institutions (WTO, IMF, World Bank)
• Liberal values: democracy, cooperation, rule-based order

It delivered:

• High growth
• Poverty reduction in many countries

What has changed now?

• Globalisation as a political system has broken down
• Countries now see trade as a tool of national power
• Trade surpluses = strength
• Trade deficits = weakness

globalisation collapse (Unintended consequences)

• Returns to capital increased faster than wages
• Rich benefited more than workers
• China: Integrated with global markets and Benefited from trade, technology, supply chains BUT retained strong state control over: Capital, labour etc
• International aid now serves donor countries’ interests: Developing countries have less negotiating power

India still has potential

India can still succeed in areas such as:

• Digital Public Infrastructure (Aadhaar, UPI)
• Renewable energy
• Services sector
• Democratic decentralization

CONCERNS

In a mercantilist world:

• Low state capacity = long-term irrelevance

India needs:

• Strong state capacity
• Social cohesion
• A social contract that: Shares growth more evenly, Invests in people