Context:
The article examines the weakening of liberal globalisation and the rise of state-centric mercantilism, questioning India’s preparedness in a fragmented world order.
Key Highlights:
- Shift in Global Order
- Free trade–based globalisation is eroding.
- Rise of protectionism and tariff threats.
- Trade increasingly used as a tool of state power.
- Structural Changes
- China’s rise without fully integrating into liberal multilateral norms.
- Returns to capital outpacing wage growth.
- Manufacturing relocation and migration pressures.
- Political Economy Trends
- Rise of populist politics.
- Aid becoming conditional.
- National sovereignty prioritized over liberal norms.
- India’s Position
- Demographic dividend remains underutilised.
- Potential strengths:
- Digital public infrastructure.
- Renewable energy.
- Services exports.
- Democratic decentralisation.
Relevant Prelims Points:
- Globalisation: Free movement of goods, capital, services.
- Mercantilism: Trade surplus–oriented state power doctrine.
- Demographic dividend.
- Multilateral institutions and WTO principles.
Relevant Mains Points:
- From Liberal Order to Strategic Competition
- Weaponisation of trade and tariffs.
- Supply chain nationalism.
- Weakening of WTO dispute mechanisms.
- Implications for India
- Export vulnerability.
- Oil import dependency.
- Need for resilient supply chains.
- Internal Constraints
- Social stratification.
- Skill gaps.
- Limited manufacturing competitiveness.
- Opportunity Areas
- Digital public goods model (UPI, Aadhaar).
- Green transition.
- Trusted supply chain partner role.
Way Forward:
- Strengthen domestic manufacturing base.
- Invest in skilling and innovation.
- Diversify trade partnerships.
- Enhance state capability and social cohesion.
UPSC Relevance:
- GS 1: World History (evolution of global order).
- GS 2: International relations.
- GS 3: Trade policy, growth strategy.