Navigating through a Fractured Age

As the option of aligning with either of the emerging US- and Sino-centric blocs appears infeasible, India must play a more strategically autonomous role in the world

- N CHANDRA MOHAN

LOOKING AHEAD, INDIA IS strategic challenge is to navigate through a world economy that is fragmenting broadly into USand Sino-centric blocs. Due to the hegemonic struggle for dominance between Washington and a resurgent Beijing, trade and investment flows between these blocs are declining by more than within these blocs since the last four years.

How India leverages the opportunities thrown up by global fragmentation has a major bearing on its higher levels of ambition on the trade and investment front to become a developed nation by 2047. India's policy choices in this regard are no doubt complicated by the stress in its current ties with the US despite a strategic relationship and continuing face-off on the border with China.

Although the fracturing of the global economy along geopolitical lines has been observed by the International Monetary Fund and World Trade Organization (WTO), this process has been authoritatively examined in Neil Shearing's new book, The Fractured Age. At the outset, he argues that fracturing does not imply deglobalisation as trade flows continue to increase and cross-border capital flows remain high. The vast majority of global trade is broadly unaffected by US-China fracturing which impacts only 15% of flows of strategic goods like high-tech electronics, green technologies, and critical minerals. In this milieu, nonaligned countries may wish to engage with both blocs but Shearing makes the point that they will have to pick a side.