Chapter 18 · Topic 18.3 · Prelims + Mains3 of 3
Globalization: Challenges and the future
Key points
- Globalization's challenges: inequality, fast-spreading crises (2008, COVID-19) and environmental harm.
- Deglobalisation includes tariffs, reshoring, friend-shoring and China-plus-one.
- For India, supply-chain shifts are a chance (Make in India, PLI) but small producers face risks.
9 PYQs 2015–2026
Prelims box: facts and traps
- China-plus-one: add a second base outside China.
- Friend-shoring: supply chains in friendly countries.
- PLI: production-linked incentives.
Challenges and the future
Think of a family that buys everything from one big shop across town. It is cheap, until the road is blocked and the fridge goes empty. COVID-19 was that blocked road for the world. Countries learned that relying on one supplier, often China, was risky.
| Challenge | Detail |
|---|---|
| Inequality | Within countries; uneven benefits |
| Crises | 2008 financial crisis; COVID-19 exposed supply-chain risks |
| Environment | Emissions from trade and consumption |
| Deglobalisation | Tariffs, reshoring, ‘friend-shoring’, China-plus-one |
| India | Opportunity in supply-chain shifts; risks to small producers |
Each challenge, explained
- Inequality: countries as a whole grew richer, but gains went mostly to the skilled and to owners of capital. Many factory workers and small farmers fell behind.
- Crises: because economies are linked, the 2008 US banking crash hit jobs worldwide. COVID-19 then stopped factories and ships, causing shortages of medicines, chips and more.
- Environment: shipping goods around the world and buying more things add to carbon emissions that heat the planet. Polluting factories also tend to move to countries with weaker rules.
- Jobs and machines: automation and AI let firms do more with fewer workers, adding to job worries.
Deglobalisation, in plain words
- Tariffs: taxes on imports, raised to protect home industry.
- Reshoring: bringing factories back home.
- Friend-shoring: moving supply chains to friendly countries.
- China-plus-one: firms keep China but add a second base, such as India or Vietnam.
What it means for India
India is trying to grab the chance through schemes like Make in India and production-linked incentives (PLI), which pay firms extra for making more in India. Apple’s suppliers now assemble many iPhones in India. But small firms may struggle against big global players, and rising tariffs abroad can hurt exporters.
The 2026 question asks about the impact of globalization on Indian youth. Socially: more mobility and new lifestyles. Politically: global awareness through social media. Economically: service jobs and start-ups, but also insecure gig work. Culturally: global tastes, along with questions of identity.
Evaluate the impact of globalization on Indian youths with reference to social, political, economic and cultural spheres.
Impact on Indian youth, in a table
| Sphere | Positive | Negative |
|---|---|---|
| Economic | IT, start-up and service jobs | Gig work with no security |
| Social | Study and work abroad, more freedom | Stress, loneliness, family strain |
| Political | Global causes, online activism | Fake news, echo chambers |
| Cultural | Exposure to world culture | Consumerism, loss of local roots |
Common doubts
Is globalization ending? No. Trade is still huge. It is changing shape: more regional, more digital, and more shaped by security worries.
Is deglobalisation good for India? It can be, if India offers good roads, power, skilled workers and simple rules to attract firms leaving China.
How can globalization be made fairer? By investing in skills and education, giving social security to informal and gig workers, protecting the environment, and making sure small firms can reach global markets through digital tools.
What lessons did COVID-19 teach? Keep more than one supplier for key goods like medicines and chips, build some stock at home, and work with trusted partners.
Key milestones
| Year | Event |
|---|---|
| 1991 | India’s LPG reforms |
| 1995 | WTO formed |
| 2008 | Global financial crisis |
| 2020 | COVID-19 supply shock |
What UPSC asks
Prelims: China-plus-one, friend-shoring, PLI. Mains: impact of globalization on youth, and India’s chances in a deglobalising world.
Mains box: analysis and answer points
- Globalization and Indian youth (2026): social, political, economic, cultural.
- India in a deglobalising world: chances and risks.
Practice
Prelims PYQs on this topic (8)
Consider the following statements with reference to the Sagarmala Programme of the Government of India :
- I. The Sagarmala Programme seeks to achieve port-led economic growth through cost-effective and sustainable coastal infrastructure.
- II. The success of the Sagarmala Programme is reflected in significant growth in coastal and inland waterway shipping, along with improved global port rankings.
- III. Sagarmala 2.0 aims to position India as a global maritime innovation hub aligned with Atmanirbhar Bharat and Viksit Bharat 2047 visions.
Which of the following relationships among the above statements is/are correct ?
- 1. Statement II validates the effectiveness of the strategies envisioned in statement I.
- 2. Statement III extends the objectives of statement I by embedding them into a future-oriented innovation framework.
- 3. Statement I contradicts statement III by focusing only on traditional infrastructure instead of modern innovation.
Select the answer using the code given below :
Answer (b) & explanation
Relationships 1 and 2 are correct (b). Sagarmala (2015, Ministry of Ports, Shipping and Waterways) aims at port-led development. Relationship 1 is right: growth in coastal and inland waterway shipping, plus better global port rankings, is evidence that it works. Relationship 2 is right: Sagarmala 2.0 builds on the same aim with innovation and shipbuilding, linked to Atmanirbhar Bharat and Viksit Bharat 2047. Relationship 3 is wrong: building on an aim is not contradicting it. So options (a), (c) and (d) fail.
Notice the four pillars: port modernisation, port connectivity, port-led industrialisation and coastal community development. Also related: Maritime India Vision 2030 and Amrit Kaal Vision 2047. Vizhinjam and Vadhavan are big new ports.
Answer as per the official UPSC answer key.
If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India ?
- 1. Not depending on short-term foreign borrowings
- 2. Opening up to more foreign banks
- 3. Maintaining full capital account convertibility
Select the correct answer using the code given below :
Answer (a) & explanation
Only statement 1 is correct (a). In a crisis, short-term foreign loans are the first to leave or not be renewed. This happened in the East Asian crisis of 1997, when countries such as Thailand and Indonesia had borrowed heavily short-term. So avoiding them gives protection (1). Statement 2 is wrong because more foreign banks would tie India more closely to world markets. In a crisis, they may pull money back to their home countries. Statement 3 is wrong because full capital account convertibility would let money flow out freely, spreading a shock faster.
India's partial convertibility and large forex reserves helped it weather the 2008 crisis. Notice the Tarapore Committees (1997, 2006), which set preconditions for full convertibility, such as low inflation and a strong banking system.
Answer as per the official UPSC answer key.
Read the passage
The rural poor across the world, including India, have contributed little to human-induced climate change, yet they are on the frontline in coping with its effects. Farmers can no longer rely on historical averages for rainfall and temperature, and the more frequent and extreme weather events, such as droughts and floods, can spell disaster. And there are new threats, such as sea level rise and the impact of melting glaciers on water supply. How significant are small farms ? As many as two billion people worldwide depend on them for their food and livelihood. Small-holder farmers in India produce 41 percent of the country’s food grains, and other food items that contribute to local and national food security.
What is the most logical and rational corollary to the above passage ?
Answer (a) & explanation
The corollary is that supporting small farmers is part of any sustainable development agenda (a). Step 1: the passage says small farmers feed about two billion people, yet they face climate shocks first. So helping them is central to sustainable growth. That is (a). Step 2: option (d) says only small farmers can ensure food security. But they grow 41% of India's grain, not all of it. So "only" fails. Step 3: option (b), poor countries have little role in fighting warming, is not supported. Option (c), India will have no food problem, contradicts the passage's warning.
Tip: an "only" option needs the passage to say "all". A 41% share is large but not the whole.
Answer as per the official UPSC answer key.
The term “sixth mass extinction/sixth extinction” is often mentioned in the news in the context of the discussion of
Answer (d) & explanation
Option (d) best describes it. Earth has gone through five mass extinctions. The last, about 66 million years ago, wiped out the dinosaurs after an asteroid struck. Scientists warn that a sixth is under way, this time caused by humans: overuse of resources, habitat loss and fragmentation, pollution, invasive species and climate change. Species are vanishing at many times the natural background rate. Options (a) and (c) name only one cause each: monoculture or GM crops. Option (b) is wrong because the term is not about a coming meteorite.
Notice the IPBES report (2019), which warned that about one million species face extinction. The Kunming–Montreal Framework (2022) responded with the 30x30 target: protect 30% of land and sea by 2030.
Answer as per the official UPSC answer key.
Read the passage
The Global Financial Stability Report finds that the share of portfolio investments from advanced economies in the total debt and equity investments in emerging economies has doubled in the past decade to 12 percent. The phenomenon has implications for Indian policy makers as foreign portfolio investments in the debt and equity markets have been on the rise. The phenomenon is also flagged as a threat that could compromise global financial stability in a chain reaction, in the event of United States Federal Reserve’s imminent reversal of its “Quantitative Easing” policy.
Which among the following is the most rational and critical inference that can be made from the above passage ?
Answer (d) & explanation
Emerging economies face a risk of shock from advanced economies (d). Step 1: find the warning. Portfolio money from advanced economies into emerging markets has doubled to 12%. This is "flagged as a threat" that could start "a chain reaction" if the US Federal Reserve reverses Quantitative Easing. So emerging economies are at risk of shock. Step 2: test the others. Option (a) is wrong: the passage flags a risk, not that such investment is bad. Option (b) is wrong: it does not say advanced economies undermine stability on purpose. Option (c) is wrong: it never suggests India should stop accepting such investment.
Tip: a passage that flags a risk does not recommend a ban. Choose the option that matches the strength of the passage.
Answer as per the official UPSC answer key.
Which of the following statements with regard to the arrival of Amur Falcons at Doyang Lake in Nagaland each year from Mongolia is/are correct ?
- 1. It showcases how sustained local conservation efforts can contribute to the arrival and protection of international migratory birds.
- 2. It reflects the global success of advanced tracking technologies that guide migratory birds back to their stopover sites.
- 3. It confirms that Amur Falcons have adapted to permanent residency in India due to favourable habitat changes.
Select the answer using the code given below :
Answer (a) & explanation
Only statement 1 is correct (a). Statement 1 is right: around 2012, villages near Doyang in Nagaland, once known for mass hunting of the birds, turned into protectors, so the falcons now roost safely. Statement 2 is wrong: satellite tags only track the birds; they do not guide them. Statement 3 is wrong: Amur falcons stay only a few weeks, so they are not permanent residents. So options (b), (c) and (d) fail.
Notice their journey: they breed in Mongolia, Siberia and northern China, rest in Nagaland, then cross the Arabian Sea to winter in southern Africa, one of the longest raptor migrations. Pangti village is called the "Falcon Capital of the World". Tagged birds have been named after these villages.
Answer as per the official UPSC answer key.
Mains PYQs on this topic (1)
Write an answer
In 150 words, explain the significance of Globalization with one recent example.
Flashcards (3)
Pandemic that exposed supply chains?
COVID-19.
Diversifying away from China?
China-plus-one.
Trade among allies?
Friend-shoring.
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