India's evolving economic power can lead us into a re-globalised world

While India successfully navigates new trends in globalisation, driven by geopolitics and the need for greater supply chain resilience, the country can demonstrate the way forward to heal the fractures in global trade

Updated: Jun 6, 2023 06:04:07 PM UTC
Image: Shutterstock

The vast economic potential of India first became obvious to me many years ago when I spoke to some street vendors selling beautiful bright-coloured textiles and fabrics in Mumbai. They told me that one of their main challenges was getting access to international markets. Working with my team, we identified a network of Indian textile manufacturers with whom we had existing relationships, and facilitated a connection between the two parties. It ultimately presented the vendors with an opportunity to reach new geographies.

It was clear to me then that trade could unlock this vast potential in India. A huge amount of progress has been made over the years, but it is now that we are beginning to see the enormity of the opportunity, and I am incredibly excited about what can be achieved in the next ten years.

For example, it has been just over a year since the UAE and India signed the Comprehensive Economic Partnership Agreement (CEPA), and in 2022, the value of non-oil bilateral trade reached $49 billion, a 10 percent increase on 2021. By reducing tariffs and enhancing market access, we reduce foreign investment risk and make it easier for businesses and investors to trade internationally. This will allow the total trade value between us to reach $100 billion by 2027.

But beyond UAE and India trade, such agreements are a way forward to revitalise the global economy. While India successfully navigates new trends in globalisation, driven by geopolitics and the need for greater supply chain resilience, the country can demonstrate the way forward to heal the fractures in global trade.

This increasingly fragmented supply chain world, characterised by protective resilience strategies such as friend-shoring and near-shoring, needs inclusive growth to ensure trade lifts billions out of poverty and supports prosperity the world over. India's reputation as a neutral and trusted partner, combined with its high-value economic indicators and comprehensive partnerships, makes it the perfect platform to re-globalise international trade.

As the fifth largest economy in the world and the second largest in Asia, the country's dedication to working with nations across the world in priority areas such as global value chains, food security, maritime defence, and technology is vital for setting precedents for a re-globalised world. For example, in partnerships such as the India-Israel-United Arab Emirates-United States (I2U2), the Shanghai Cooperation Organization (SCO), and UAE-France-India (UFI) Trilateral, the nation is demonstrating how we can remodel trade and globalisation to continue to work for us all.

India's G20 presidency this year comes at a time when global economies are relying on Indian leadership to provide a roadmap for an equitable post-pandemic recovery. The country's priority areas, including sustainable growth, digital public infrastructure, and tech-enabled development, correspond to the challenges of the 21st century and demand collective action for resolving global development issues.

The nation’s expansive manufacturing sector has performed incredibly well in the post-pandemic world, contributing to a record merchandise export target of $400 billion in FY22. The country is all set to exceed its $760 billion goods and services export target set for 2022-23. The government has exponentially accentuated its logistics capabilities to effectively augment its vision of becoming a global manufacturing hub. India's liberal outlook for free trade agreements with developed economies and investor-friendly and efficiency-enabling mechanisms, including 100 percent FDI in high-priority infrastructure sectors such as ports and shipping, have made it an attractive destination as a hub for logistics and infrastructure.

Also Read: India's potential to dominate smartphone and semiconductor manufacturing for the world

And, of course, India's tech talent can create innovations that can solve global trade challenges. The country's strength in deploying public digital infrastructure at scale, exemplified through initiatives like India Stack and platforms such as Digi Locker and Unified Payments Interface (UPI), are recognised and implemented globally. Platforms like the Gati Shakti National Master Plan and Unified Logistics Interface Platform (ULIP) highlight the potential of embracing SMEs from emerging markets in domestic and global value chains, through increased end-to-end digitisation, that will also enhance visibility and transparency along value chains.

Overarching all of this is India's strategic geographical location in the Indian Ocean, situated between the Middle East, Central Asia, China, and Southeast Asia. Its location gives it considerable leverage for becoming one of the leading trans-shipment hubs for Asia-Africa, and Asia-US/Europe container traffic.

India has the opportunity to establish a cooperative framework that simultaneously complements COP27's priorities of mobilising sustainable finance, especially for developing economies. As emerging markets and developed economies actively engage with India to gain insights into technological know-how, they can integrate digital-forward tools in global value chains. This will enhance international operational efficiencies and increase global trade volumes.

Fostering partnerships will be crucial to driving inclusive global progress, and India's potential to bring the world together to tackle global issues is immense. With a conducive domestic environment that builds products at scale, backed by strong bilateral partnerships, infrastructure, and logistics, India can emerge as a true enabler of global trade.

His Excellency Sultan Ahmed bin Sulayem is Chairman and Chief Executive Officer of DP World.

The thoughts and opinions shared here are of the author.

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