The End of Globalisation: Can India Cope?
Introduction: Is Globalisation Really Ending?
Talk of the “end of globalisation” has surged in recent years, driven by geopolitical tensions, trade disruption, and shifting economic strategies among major powers. While global integration hasn’t vanished, its traditional form — characterised by unfettered trade, rapid capital flows, and deeply interconnected supply chains — is straining under multiple pressures. Some argue we are entering a new phase of globalisation rather than its outright end, with Asia and the Global South playing a more decisive role in shaping it.
The Economic Survey of India 2026 points to signs of a changing global economic environment — from export controls and technology access restrictions to carbon border mechanisms — which collectively signal the limits of what used to be naive or frictionless globalisation.
This editorial explores the causes behind this shift, examines India’s responses, and weighs the opportunities and risks for India in this evolving global order.
Reasons for Strain on Globalisation:
Geopolitical Rivalries and Fragmentation
The rivalry between major powers like the United States and China has prompted trade tensions, sanctions, and supply chain fragmentation. Rising nationalism and protectionist policies have encouraged countries to re-evaluate dependencies and prioritise domestic capacity.
Declining Investment Flows
Foreign direct investment (FDI) — once a pillar of global economic integration — has weakened. According to the UN, global FDI plunged significantly in recent years, a concrete indicator of retreating global economic linkages.
Policy Shifts and Trade Controls
Countries are increasingly using export controls on high-tech inputs, and some pursue carbon border tax mechanisms — all of which affect how and where industries source materials and produce goods. This challenges the idea of seamless global value chains.
Resilience Vs. Efficiency
After the pandemic and supply chain disruptions, governments now prioritise resilience over efficiency, preferring buffer stocks, diversified suppliers, or local manufacturing — a shift from core globalisation logic. Critics argue this doesn’t end globalisation, but transforms it into a regionalised and resilient ecosystem.
Impact on India: Challenges and Risks
India, as a rapidly growing emerging economy, is directly impacted by these global trends — both positively and negatively.
Export and Trade Uncertainty
India’s economy has benefited from global trade, particularly in services and software exports. Yet slower expected trade growth worldwide means export dynamics could shift unfavourably for India without diversification and value addition.
Technology Denial Regimes
New tech restrictions imposed by advanced economies limit access to cutting-edge technologies for countries like India, complicating high-tech industrial development and increasing costs of innovation.
Supply Chain Risks and Overdependence
The broader global trend of supply chain reconfiguration — originally aimed at reducing overdependence on China — creates opportunities, but transitioning is complex and time-consuming. Experts warn China-plus-one strategies often just reroute reliance rather than significantly reduce it.
Uneven Gains from Globalisation
Internally, globalisation has helped certain sectors — notably IT and services — grow rapidly, but others (agriculture, traditional manufacturing) lag. This structural disparity poses policy challenges if global shocks hit India’s major export sectors.
Can India Cope — And How?
Despite uncertainties, India’s position today is stronger than in previous decades, and several factors suggest it can adapt if strategic choices are made.
Resilience in External Sector
Recent data shows India’s exports have reached record highs, demonstrating resilience amid shifting global conditions.
Education and Talent as Strategic Assets
The Economic Survey highlights the internationalisation of higher education as one pillar of India’s global strategy — attracting global talent and retaining domestic skilled workers.
“Globalisation 2.0” and New Alliances
Indian industry leaders describe the emerging global order as Globalisation 2.0: less reliant on old power structures and more regional, multipolar and technology-driven. India’s stable democracy, large market, and growing capabilities position it well in this model.
This perspective sees not the end of integration, but its transformation — where India can emerge as a new centre of gravity in a diversified global ecosystem.
Strategic Policy Mix: Swadeshi + Global Engagement
India now emphasises ‘Swadeshi’ (self-reliance) not as isolationism, but as strategic resilience — building domestic capabilities while remaining open to trade and investment selectively.
Diversifying Diplomatic and Economic Ties
In trade diplomacy, recent revival of dialogues like the India-EU trade deal reflects India’s proactive role in shaping new patterns of economic cooperation.
India’s participation in regional groupings and efforts at dedollarisation — including settlement in local currencies for bilateral trade — also hint at its readiness to navigate changing global financial structures.
Conclusion: Between Continuity and Change
It would be simplistic to declare the death of globalisation. What we are witnessing instead is likely a reconfiguration — from a unipolar, liberalised global market to a multipolar, resilient, regionally intertwined world economy. India, with its demographic advantage, strong service sector, and evolving industrial base, is sizeable enough to play a key role in this reconfigured world.
However, reaping the benefits will require strategic policymaking — balancing self-reliance with global engagement, investing in technology and skills, diversifying trade partners, and reinforcing domestic industries without succumbing to protectionism.
Ultimately, whether India copes with the end of old-style globalisation depends not on passive adaptation, but on how vigorously it shapes Globalisation 2.0 to leverage its strengths while mitigating vulnerabilities.
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