Now Reading: Globalisation evolving, not retreating, as services and investment grow
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Globalisation evolving, not retreating, as services and investment grow
Globalisation evolving, not retreating, as services and investment grow
Globalisation is transforming rather than retreating, with cross-border integration shifting from merchandise trade to services, investment and digital flows. The KOF Globalization Index shows the world became more globalised between 2010 and 2023, though major economies like the US and China have turned inward on goods trade while connector economies such as India, Vietnam and the UAE have become more integrated.
Services trade has reached a record 15.1% of world GDP in 2024, up from 12.4% in 2008, while merchandise trade has never sustainably regained its 2008 peak of 51% of GDP. Global production networks remain resilient: the foreign value-added share of gross exports hit a record 26.9% in 2022 before stabilising around 25%.
Firms are responding to supply-chain risks by diversifying suppliers and rerouting shipments rather than abandoning international production networks. For India, the push for self-reliance under Prime Minister Narendra Modi need not conflict with deeper global integration.
Indian Opinion Analysis
The KOF index used in this analysis is a widely cited composite measure of economic, social and political globalisation, not a trade-specific metric. India's foreign value-added share of exports, though not separately broken out here, has historically lagged behind Southeast Asian peers, partly due to policy barriers. The real question for policymakers is whether the shift toward services globalisation can compensate for limited goods trade integration, and whether India's domestic capability push, through production-linked incentive schemes, aligns with the supply-chain diversification trend. Watch for changes in India's services export data over the next two quarters as a lead indicator.
Source: livemint.com
This story was synthesised by AI from the source linked above. Methodology and corrections.
