THE END OF GLOBALIZATION & WHAT IT MEANS FOR INDIA
Global Affairs
Session 18
20 April 2026
END OF GLOBALIZATION & IMPACT ON INDIA
From prosperity and interdependence to protectionism, rivalry and fractured supply chains
Globalization promised freer movement of goods, capital, ideas and people, along with prosperity and stability. It expanded trade, investment and India’s economic opportunities, but unequal gains, China’s manufacturing rise, political backlash, geopolitical rivalry and protectionist policies have pushed the system into reverse.
Globalization: integration and interdependence
Globalization is the process of integration and interdependence among countries, cultures and economies through trade, investment, technology and communication. It widened cross-border connections and allowed countries to participate in a larger global economic system.
- International trade: Global markets expanded for goods and services, increasing commercial exchange among countries.
- Consumer access: Wider markets gave consumers more choices and exposed producers to greater competition.
- Economic growth: Trade, investment and specialization generated wealth and improved living standards in many regions.
- Technology and knowledge: Ideas, innovation and scientific advances spread more rapidly across borders.
- Labour markets and jobs: Global economic activity created new work opportunities, skills and areas of specialization.
- Cultural exchange: Music, food, ideas and social practices travelled more easily between societies.
The golden age of globalization
Globalization was once presented as a force for prosperity and stability. Policymakers and academics expected growing economic connections to reduce the likelihood of conflict.
- Belief in prosperity and stability: Economic integration was expected to connect societies and make disruption less attractive.
- Open flow of resources and ideas: Goods, capital, ideas and people moved across borders, allowing countries to specialize and benefit from global efficiency gains.
- Interdependence for peace: Shared economic gains were supposed to discourage countries from damaging mutually beneficial relationships.
What went wrong
Over time, globalization failed to distribute its gains equitably, particularly within advanced economies. Aggregate growth could coexist with factory closures, stagnant wages and regions that felt left behind.
- Unequitable benefits and displaced workers: High overall gains did not prevent job losses and economic insecurity for particular workers and communities.
- Political backlash: Inequality and employment disruption encouraged anti-globalization rhetoric and claims of unfair competition.
- Geopolitical rivalry: Trade and capital flows increasingly aligned with political blocs instead of bridging them, reinforcing strategic divisions.
China ran with the trophy
United States financial elites found it useful to outsource manufacturing to lower-cost China. China used the opportunity, including Special Economic Zones, to become a major manufacturing and export power.
- Outsourcing and manufacturing boom: Cheaper production shifted manufacturing capacity towards China.
- Cooperation became rivalry: As China’s industrial and export strength grew, the United States increasingly viewed the relationship as a strategic competition for dominance.
- The “China shock”: Cheap imports and stronger competition contributed to factory closures, manufacturing job losses and long-term employment disruption in parts of the United States.
- Persistent disputes: Subsidies, market access and technology transfer deepened tensions on both sides.
What is “Big Oil”
“Big Oil” refers to the world’s largest and most influential oil and gas corporations, including companies such as ExxonMobil, Shell, BP, Chevron and TotalEnergies.
- Major global corporations: These companies operate at enormous scale across the energy sector.
- Economic and political influence: Their role in energy markets, pricing, lobbying and regulation gives them significant policy influence.
- Control across the fossil-fuel ecosystem: They are central to petroleum exploration, production, refining and distribution.
How India benefited from globalization
The presentation identifies several channels through which globalization supported India’s economic expansion and integration with world markets.
- Accelerated GDP growth: India experienced rapid economic expansion, stronger indicators and movement up global rankings.
- IT and services boom: Global outsourcing supported software exports, digital innovation, new jobs and India’s emergence as an important services hub.
- Foreign investment: Greater foreign direct investment brought capital, technology, knowledge transfer and new industries.
- Diversified exports: Access to global markets expanded exports of goods and services and reduced dependence on a narrow set of products.
- Employment and poverty reduction: New economic opportunities increased incomes, improved living standards and contributed to lower poverty levels.
How Big Oil affects United States politics
- Lobbying and campaign funding: Oil and gas companies spend heavily on lobbying and political donations, seeking to influence lawmakers and legislation on energy, climate policy and drilling.
- Energy and environmental policy: The industry favours policies that expand fossil-fuel production, open federal lands, ease environmental rules and slow the transition to renewable energy.
- The revolving door: Movement of personnel between government and oil companies can bring industry perspectives directly into advisory, policy and regulatory roles.
Globalization moves into reverse gear
The presentation describes a shift from integration towards strategic separation, protectionism and fragile supply chains.
- Mutual distrust and friction: China’s policies and United States reactions intensified disputes over subsidies, market access and technology transfer.
- Protectionist tools: Governments increasingly used tariffs, export controls and industrial policy to protect domestic industries and gain strategic advantage.
- Supply-chain ripple effects: Trade wars and policy barriers disrupted global supply networks, allowing even small breaks to spread across industries.
Was any one of them anti-Big Oil?
The presentation places the following United States presidents, from both major parties, under this question. It does not provide a separate president-by-president verdict.
- Donald Trump — Republican — 2017–2021
- Barack Obama — Democratic — 2009–2017
- George W. Bush — Republican — 2001–2009
- Bill Clinton — Democratic — 1993–2001
- George H. W. Bush — Republican — 1989–1993
- Ronald Reagan — Republican — 1981–1989
- Jimmy Carter — Democratic — 1977–1981
- Gerald Ford — Republican — 1974–1977
- Richard Nixon — Republican — 1969–1974
- Lyndon B. Johnson — Democratic — 1963–1969
What next for globalization
- Reshoring and friend-shoring: Companies prioritize geopolitical safety, diversification and supply-chain resilience over pure cost efficiency.
- Weakened interdependence: Reduced cross-border dependence weakens globalization’s stabilizing effect and makes cooperation between rivals harder.
- Geopolitical and economic volatility: Fragmentation raises the risk of wider conflicts, uncertainty and cascading economic effects.
- Reform, not abandonment: The presentation concludes that globalization should be improved through better policies, institutions and safeguards rather than simply discarded.
Iran war and its impact on globalization
The presentation links war involving Iran to several channels through which conflict can intensify the retreat from globalization.
- Energy crisis and supply chains: A Strait of Hormuz disruption could cause oil-price shocks, energy shortages, higher shipping costs and increased insurance rates.
- Geopolitical escalation: A wider regional conflict could draw in major powers, weaken alliances and increase global political tensions.
- Economic downturn: Reduced trade, higher food and goods prices, recession risks and investment uncertainty could spread internationally.
- Humanitarian emergencies: Displacement, refugee flows, strain on neighbouring countries and restricted aid access would deepen the human cost.
- Weakened cooperation: Protectionism, weaker global institutions and growing cybersecurity threats could further reduce international collaboration.
Value addition
Glossary and related terms
- Globalization
- The increasing integration and interdependence of national economies and societies through trade, investment, technology, communication and movement across borders.
- Interdependence
- A condition in which countries rely on one another for markets, resources, capital, technology or security.
- Outsourcing
- Shifting a business activity or production process to an external supplier, often in another country.
- Special Economic Zone
- A designated area with special tax, regulatory or trade rules intended to attract investment and industrial activity.
- China shock
- The rapid economic and labour-market effects associated with the sharp rise of Chinese manufacturing exports.
- Protectionism
- Government action designed to shield domestic producers from foreign competition through tariffs, restrictions, subsidies or regulation.
- Tariff
- A tax imposed on imported goods.
- Export control
- A restriction on the sale or transfer of specified goods, technologies or services to another country.
- Industrial policy
- Government measures intended to develop, protect or redirect strategic sectors of the economy.
- Reshoring
- Returning production or business activity to a company’s home country.
- Friend-shoring
- Locating supply chains and production in countries considered politically or strategically trusted.
- Supply-chain disruption
- A break or delay in the networks that connect raw materials, production, transport and final delivery.
- Big Oil
- A collective term for the largest and most influential multinational oil and gas corporations.
Value addition
Conceptual references
- Globalization as a system of cross-border flows in goods, capital, ideas and people.
- Distributional debates concerning aggregate gains, displaced workers and regional inequality.
- The “China shock,” outsourcing and the transition from United States–China cooperation to strategic rivalry.
- Protectionism through tariffs, export controls, industrial policy, reshoring and friend-shoring.
- Energy-market power, Big Oil and the interaction between conflict, supply chains and global cooperation.
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