Geo-Economic Trends in World Trade: India’s Policy Options

Since the onset of the Sino-US trade war, global economic integration has faced challenges increasingly. Disillusionment over uneven benefits of free trade, the fragility of highly specialised global supply chains following exposure to the COVID-19 pandemic and geo-political frictions heightening the advent of the war between Russia and Ukraine, have all contributed to an insecure and volatile world order. The global economy has been beset by multidimensional crises such as trade fragmentation, unilateral industrial policies, a reversal of multilateralism and threats to green transition. The world economy is witnessing new partnerships and alliances. Geo-economic trends are increasingly inward looking and not based on principles of multilateralism, or free and fair trade. The share of world trade has not significantly declined but if current trends continue, lesser economies risk being more marginalised. For India, stronger multilateralism remains its best bet, though it needs fresh policy options to cope with emerging challenges.