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De-globalization:
According to Walden Bello and Focus on the Global South, who coined the term "de-
globalization", the objective is not to withdraw from the global economy, but rather to trigger a
process of restructuring the world economic and political system to strengthen local and national
economies instead of weakening them. The 2008 global financial crisis played a pivotal role in
propelling the de-globalization trend. In reaction to the worldwide economic turmoil, certain
governments adjusted their strategies and messaging to emphasize protectionism, implementing
measures to restrict the unrestricted movement of trade and investment across international
boundaries.
The United States, under the administration of President Barack Obama, implemented measures
like the "Buy American" provisions in the American Recovery and Reinvestment Act of 2009,
which some saw as early signs of de -globalization.
Additionally, the United Kingdom's decision to leave the European Union (Brexit), which was
set in motion by the Brexit referendum in June 2016, can be considered a significant political
event that signaled a move away from regional integration and a degree of de-globalization.
The reasons behind adopting de-globalization by the major economies like the United States,
European Union, United Kingdom, India, Japan, China, Russia are economic nationalism, trade
tensions and tariffs, regionalization, national security concerns, environmental crisis and
geopolitical conflicts.
Rationale for De-Globalization and its impact on India:
● Preservation of Cultural Heritage: While globalization has unquestionably facilitated
cross-cultural exchanges, it has also contributed to the homogenization of cultures
worldwide. In the Indian context, this has resulted in the adoption of Western customs
and a diminishing connection to our rich 'Bhartiya Sanskriti’. De-globalization is
necessary to reintroduce today's generation to the importance of our unique Indian
culture.
● Promoting Economic Self-Reliance and domestic industries: Advocates argue that de-
globalization can bolster India's self-sufficiency, especially in critical sectors like
agriculture, manufacturing, and healthcare. Reducing reliance on global supply chains
could enhance India's resilience during global crisis and Measures associated with de-
globalization, such as tariffs and trade barriers, have the potential to shield domestic
industries from foreign competition and potentially generate employment opportunities
within India.
Challenges in India's Embrace of De-Globalization:
Global Challenges:
● Economic Slowdown: De-globalization may decelerate India's economic growth as it
heavily relies on global trade and investment.
● Trade Disputes: Protective measures may lead to trade conflicts, impacting Indian
businesses and consumers.
● Diplomatic Strain: Shift from global integration could strain diplomatic relations with
pro-globalization nations.
● Technology Constraints: Reduced global engagement may limit India's access to
advanced technologies and hinder tech sector growth.
● Foreign Investment: De-globalization may deter foreign investors, affecting capital
inflow for development.
● Resource Security: Reliance on global markets for energy and resources may pose risks
due to supply chain disruptions.
● Geopolitical Impact: India's global stance can influence its position in international
alliances and security affairs.
● Cultural and Educational Impact: De-globalization may reduce opportunities for cultural
enrichment and international education exchanges.
Domestic Challenges
Implementation of deglobalization policies in India can lead to significant domestic challenges,
including the major adjustment in economic strategies and domestic strategies such as:
● Energy and Resource Management: India's energy requirements and access to raw
materials possess global dimensions. Ensuring resource security while adopting de-
globalization policies represents a multifaceted challenge.
The Reserve Bank of India (RBI) plays a vital role in addressing challenges related to adopting
de-globalization policies. As India's central bank, the RBI can use monetary policy tools to
manage economic impacts, ensure financial stability, regulate institutions, manage currency
exchange rates, strengthen the banking sector, support exports, promote financial inclusion, and
modernize payment systems to facilitate domestic trade.
● Rural Economic Growth: Focusing on domestic markets can drive investments in rural
areas, benefiting farmers and communities by modernizing agriculture.
● Rural Entrepreneurship: Encouraging local businesses and startups in rural areas for job
creation and economic development.
● Resource Efficiency: Optimizing resource utilization for sustainability and cost savings.
● Cultural Preservation: Safeguarding India's diverse cultures and traditions from global
homogenization.
● Renewable Energy: Developing the domestic renewable energy sector, including solar
panels and wind turbines, aims to reduce reliance on fossil fuel imports. Promoting use of
electrical and CNG vehicles.
● Agricultural Reforms: Recent reforms target increased farmer income and agricultural
productivity to reduce reliance on food imports.
● Skill Development: Initiatives like ‘sikho kamao yojna’ for workforce upskilling and
reskilling aim to reduce dependence on foreign expertise.
● Trade Agreements: India has reviewed and renegotiated some trade agreements to align
them with its economic and strategic interests.