Editorial 1: ​ A profound shift in the global order

Context

History should encourage India to prioritize its own path and future.

Introduction

India is at another inflexion point, reminiscent of Vasco De Gama sailing into Kozhikode in 1498 and a complacent Zamorin lacking strategic vision. Instead of trade routes, global value chains are being reshaped by force. The stakesare high for India, which is poised to become the third largest economy.

• The 75-year-old post-colonial order of globalisation with multilateralism and rule-based restrictions is outdated, as China has overtaken the U.S. in donations, manufacturing, and global trade.
• WTO, UN, and Treaties lost relevance, leading to U.S. withdrawals.
• The COVID-19 pandemic exposed the G-7's failure to consider others' needs, and now the group is splitting, creating a vacuum, with BRICS seeking more members.
• Trump responds to a more equal world shifting away from colonial frameworks.
• Bilateral deals are forcing countries to compromise, with tariffs defined by trade imbalances affecting national laws.
• LDCs no longer have privileges.
• The U.S. is restructuring its approach to prosperity and power, and others should follow.

A post-WTO frame

• The breakup of the G-7 and G-20 leaves global agenda-setting open.
• Since 2020, the U.S., China, the European Union, and India have contributed nearly three-quarters of all growth, with the U.S. and China accounting for nearly half.
• There is a decline in the relative power of the U.S., and Russia has become an Asian power, strengthening energy ties with China and India.
• Asia will soon control two-thirds of global wealth and power, as it did throughout most of civilisation, except during the colonial era.
• Geopolitics is returning to its natural state of co-existence and shared prosperity.
• India must be strategic to seize new opportunities with the dismantling of the WTO, similar to how China used its WTO entry for its rise.
• The U.S. and China are nearly balanced in terms of influence, trade, technology, and defensive military capacity, engaging in tit-for-tat on tariffs.
• The challenge for India is to manage trade relations with the U.S., promoting its agricultural and energy surpluses, while strengthening its rapprochement with China.
• Prime Minister Narendra Modi recently stated that this is the Asian Century.
• The turmoil within ASEAN presents an opportunity to work towards an Asian common market with bilateral concessions to share prosperity.
• As the WTO’s ‘most-favoured nation’ clause weakens, India should propose a new cooperative architecture to ASEAN and the African Union, as their consumption will soon exceed that of the U.S. and Europe.
• India’s world-class diplomats should develop a new set of global governance principles for a more equal world.
• To benefit from global value chains reliant on technology rather than tariffs, India must establish new rules that reduce non-tariff barriers and treat linkages between goods, services, investment, and infrastructure as part of composite agreements, with annual reviews of national impacts.

Trade and innovation neglected

Conclusion: Lesson from China

The key lesson from China's re-emergence is achieving prosperity through endogenous pathways, avoiding the Western model of socio-economic growth. Patents are a better indicator of future prosperity than GDP. Lowering electricity costsis a key incentive for economic restructuring, and prosperity is the best response to climate change. India must set grand challenges with academia and industry to leverage its world-class human talent, vast data, and proven digital infrastructure to create the best large language models, establishing India as a major cyber power. In the digital world, AI is the foundation of wealth and influence, similar to India’s historic global dominance in textiles through skill rather than monopoly.