Globalisation, marked by cross-border flows of trade, capital, and ideas, significantly accelerated India’s growth post-1991. However, the recent global trend of “slowbalization” coined by The Economist, reflects a slowdown in global trade, rising tariffs, and inward-looking policies. This calls for India to realign its strategy, balancing self-reliance (Atmanirbhar Bharat) with global economic integration.
India’s gains from Globalisation:
- GDP Growth: From 3.5% (1950–90) to 6.5%+ after liberalisation. Per capita GDP rose from $320 to $2,500.
- Digital & IT Leadership: India is home to 1,580+ Global Capability Centres (GCCs). IT exports contribute over 7.5% of GDP.
- Global Workforce & Remittances: India received $125 billion in remittances in 2023, the highest globally.
- Strategic Presence: Active in G20, BRICS, QUAD, and leading Global South advocacy.
The Changing Global Landscape:
- Rising Protectionism: The US has raised tariffs to 28%, the highest since 1901. Trade wars, especially US-China tensions, have disrupted global value chains.
- Geoeconomic Fragmentation: Alliances are shifting, and trade is being “weaponised” through sanctions, technology bans, and reshoring of industries.
- Erosion of Multilateralism: Institutions like WTO and IMF face declining legitimacy while bilateral and regional blocs are gaining importance.
- Technological Nationalism: Nations are prioritizing digital and data sovereignty over global digital commons.
Implications for India:
- Export Vulnerability: India’s export-driven sectors (textiles, electronics, IT) face demand contraction and trade barriers.
- Supply Chain Realignment: India is affected by the “China+1” policy, but needs competitive logistics and infrastructure to capitalize.
- Capital Flow Volatility: With rising global interest rates, FDI/FPI flows to India may become more volatile.
- Service Sector Pressure: AI-driven automation and nearshoring threaten India’s traditional BPO advantage.
Way Forward:
- Strategic Self-Reliance, Not Isolation: Promote sectors like semiconductors, defence, and green tech under Atmanirbhar Bharat. For example, India’s electronics exports rose 62% between FY21 and FY23, due to PLI schemes.
- Trade and Export Diversification: Strengthen FTAs with EU, EFTA, IPEF, and engage Global South. Boost high-value exports such as pharmaceuticals, clean tech, and EV components.
- Digital Diplomacy: Export India Stack, UPI, and Aadhaar-based solutions to the Global South. For example, UPI is being adopted in countries like France, UAE, and Singapore.
- Global Value Chain Integration: Improve logistics (PM Gati Shakti), reduce compliance burdens, upskill youth, embrace Industry 4.0 and AI to retain services competitiveness.
- Champion Multilateralism: Push for WTO reforms, represent Global South interests, and ensure equitable vaccine, tech, and finance access.
Conclusion:
Globalisation is not ending, but evolving. By combining economic nationalism with selective global integration, India can not only buffer external shocks but also shape a fairer, multipolar global order. The vision of Atmanirbhar Bharat must be aligned with Vasudhaiva Kutumbakam the world as one family.
‘+1’ Value addition:
- The US has raised tariffs to 28%, highest since 1901, a dramatic reversal from its post-WWII liberal trade stance.
- IMF downgraded global trade growth projections of 1.7% (2025) and 2.5% (2026) which are well below historical averages.
- The WTO’s estimate of 5.8% average annual growth between 1995 and 2023 underscores the scale of the slowdown.
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