Is India Strong Enough to Stand Alone if Globalisation Collapses?

When the U.S. President publicly links India’s trade choices to personal political approval and threatens tariffs as leverage, it signals more than diplomatic theatrics. It marks the collapse of an older global order where trade was governed by rules, institutions, and negotiated restraint. What is breaking down is not merely globalisation as economic integration, but the political system that once regulated it. In its place, mercantilism has returned—trade as an instrument of state power, where surpluses are strength and deficits a liability.

Globalisation was never just about the free movement of goods and capital. It was a political project that shaped how governments organised markets, structured societies, and cooperated through global institutions. For decades, this system appeared stable, delivering growth and poverty reduction across large parts of the world. That legitimacy has now eroded. The assumptions that underpinned global cooperation—open markets without open borders, enforceable contracts without shared sovereignty, collective problem-solving without shared sacrifice—no longer hold.

From Liberal Order to Mercantilist Fragmentation

The global economy predates liberalism. Early globalisation was built on force, extraction, and asymmetry. What emerged after the mid-twentieth century was an attempt to regulate power through institutions, norms, and multilateral frameworks. Sovereignty expanded faster than democracy, but global rules offered a stabilising framework even when unilateral power was exercised.

That restraint has now disappeared. Major economies increasingly view global cooperation as a cost rather than a collective good. Populist politics has turned societies inward, recasting migration, trade, and multilateralism as threats to national identity and control. Industrial policy has returned not as coordination but as competition.

Two unintended consequences accelerated this collapse. First, returns to capital far outpaced wage growth, intensifying inequality within and between nations. Manufacturing declined in some regions and surged in others, while migration flows exposed distributional tensions that domestic politics could not absorb. Second, China’s rise fundamentally altered the post-colonial balance. By integrating into global markets while retaining strong state control over capital, labour, and information, China accumulated unprecedented economic and political power. Its trade surpluses reflected a model of excess capacity and external demand that crowded out industrial ambitions elsewhere, including in India.

Together, these shifts changed how major powers viewed globalisation. Cooperation became conditional, sovereignty reasserted itself, and liberal norms were subordinated to strategic interest.

A World Without Anchors

The consequences of this shift are already visible. Multilateral institutions are weakened or paralysed. The UN Security Council is ineffective in managing conflict. The WTO’s dispute settlement mechanism has been dormant for years. International aid is increasingly conditional on donor priorities rather than shared development goals. For developing countries, the scaffolding that once enabled collective negotiation—on climate change, finance, or illicit flows—is steadily eroding.

This vacuum places new demands on the state. In a mercantilist world, resilience depends on institutional capacity, social cohesion, and the ability to share growth broadly enough to maintain legitimacy. Countries that lack these foundations are exposed to volatility, external pressure, and internal unrest.

India’s challenge is particularly stark. It is too large to be ignored, yet too unequal to exert power without cohesion. Over the past decade, India has struggled to convert its demographic advantage into productive capacity. Economic growth, where it exists, has not been matched by commensurate investment in health, education, or employment generation. The social pyramid has become sharply stratified, with a narrow apex supported by a vast base with limited security or voice.

India’s Narrow Path Forward

India retains potential advantages in selected domains—digital public infrastructure, renewable energy, services, and democratic decentralisation. Yet these opportunities cannot be realised in the absence of a renewed social contract. In a world where globalisation no longer cushions domestic weakness, state capacity becomes decisive.

Mercantilism rewards countries that can mobilise capital, discipline markets, and maintain internal stability. Without stronger institutions and greater social investment, India risks projecting global ambition without the economic foundations to sustain it. Claims of becoming a “Vishwaguru” ring hollow when domestic inequality deepens and public goods remain underfunded.

The end of globalisation does not mean the end of global engagement. It means engagement on harsher terms. In this environment, rhetoric cannot substitute for capacity, and scale cannot replace cohesion. India’s future relevance will depend less on navigating global forums and more on rebuilding the domestic foundations that allow it to act with confidence in a fragmented world order.

Tags: globalisation, mercantilism, global political economy, India and world order, trade politics, multilateralism, economic inequality, current affairs

Sources:

More Current affairs: https://greatlearnpro.com/updates/

Is India Strong Enough to Stand Alone if Globalisation Collapses?