Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Q5. Analyse the concept of geo-economic fragmentation. Discuss its impact on global financial flows. Evaluate India’s strategic response in this context. (15 M)
Difficulty Level: Medium
Reference: IE
Why the question
Due to rising global uncertainties, protectionism, and shifts in trade and financial flows impacting India’s economy.Key Demand of the question
The question requires explaining the concept of geo-economic fragmentation and analysing its impact on global financial flows. It also demands evaluation of India’s strategic response to such evolving global dynamics.Structure of the Answer:
Introduction
Briefly define the transition from globalisation to strategic, geopolitically driven economic fragmentation.
Body
- Concept: Explain fragmentation as reorganisation of trade, supply chains, and capital flows based on geopolitical alignments rather than efficiency.
- Impact on flows: Show how it leads to volatility, selective capital allocation, and emergence of parallel financial systems.
- India’s response: Indicate strategies like macroeconomic stability, diversification of trade, domestic capacity building, and financial market reforms.
Conclusion
Provide a forward-looking remark on balancing resilience and integration in a fragmented global order.
