top of page

By:

Apurva Rakesh Pandey

27 August 2024 at 9:53:07 am

From Gold to Chips: The Quiet Return of Mercantilism

Globalisation has not been abandoned but is being rewired around resilience, strategic trust and national power. Foreign Trade and Domestic Compared, by William Herbert, 1754 Economic history rarely buries its most influential ideas. It merely waits for circumstances to make them relevant again. Mercantilism is one such idea. For much of the post-Cold War era, it seemed safely confined to textbooks - a relic of a time of colonial monopolies and favourable trade balances. The triumph of...

From Gold to Chips: The Quiet Return of Mercantilism

Globalisation has not been abandoned but is being rewired around resilience, strategic trust and national power. Foreign Trade and Domestic Compared, by William Herbert, 1754 Economic history rarely buries its most influential ideas. It merely waits for circumstances to make them relevant again. Mercantilism is one such idea. For much of the post-Cold War era, it seemed safely confined to textbooks - a relic of a time of colonial monopolies and favourable trade balances. The triumph of globalization appeared to have settled the debate. Economic interdependence promised not only prosperity but also peace. Three decades later, that confidence has begun to dissolve. While the world has not abandoned globalization, it has become less certain about the assumptions on which it rested. Across the major economies, governments are reclaiming a role they once seemed willing to surrender. Washington has embraced tariffs, industrial subsidies and technology export controls. Beijing has tightened restrictions on critical minerals while accelerating technological self-reliance. The European Union increasingly frames trade through the language of economic security. Philosophical Shift The implications represent a change in the philosophy of globalization itself. If the first era of globalization was organised around efficiency, the emerging one is being organised around security. As Dani Rodrik has argued, industrial policy has returned to the centre of economic governance. Comparative advantage is steadily yielding to a new vocabulary of technological sovereignty, resilient supply chains and economic security. The defining question is no longer where production is cheapest, but where it is safest. The resemblance to mercantilism is impossible to ignore. Not because the world is returning to the seventeenth century, but because governments are once again judging commerce by the strategic capabilities it creates rather than the wealth it generates. Classical mercantilists controlled trade routes and protected monopolies. Today’s strategic states compete for semiconductors, artificial intelligence, critical minerals and technological standards. Gold has given way to chips and spices to rare earths. The pandemic exposed the fragility of supply chains built almost exclusively for efficiency. Russia’s invasion of Ukraine demonstrated how energy, food and finance could become instruments of coercion, while the freezing of Russian foreign exchange reserves revealed that even global financial networks were no longer politically neutral. At the same time, strategic rivalry between the United States and China expanded beyond tariffs into semiconductors, artificial intelligence, quantum computing and critical minerals. The geography of competition had shifted from factories to the technologies that would shape future economic and military power. Henry Farrell and Abraham Newman describe this landscape as one of “weaponized interdependence”, where states exploit their central positions within global networks to pursue geopolitical objectives. Interdependence, once celebrated as a guarantee of stability, has become a source of leverage. The lesson is that efficiency without resilience is no longer an economic virtue but a strategic vulnerability. Shaping Markets Once that vulnerability became visible, policy could hardly remain unchanged. Governments are no longer content merely to regulate markets; they are shaping them. From the CHIPS and Science Act in the United States to China’s drive for technological self-reliance and the European Union’s Economic Security Strategy, industrial policy has returned to the centre of economic governance. Japan, South Korea and Singapore have adopted similar approaches, strengthening economic-security frameworks while investing in advanced manufacturing and digital infrastructure. This is an acknowledgement that markets alone cannot guarantee national resilience. In many ways, it is mercantilism without colonies. Export controls, industrial subsidies, technology alliances and strategic stockpiles have become essential instruments of economic statecraft. Record central-bank gold purchases, reserve diversification and growing interest in local-currency settlement mechanisms reflect a broader search for financial resilience in an uncertain world. As Robert Blackwill and Jennifer Harris argue in War by Other Means, economic instruments have become as consequential to statecraft as military power itself. Yet to interpret these developments as the end of globalization would be to misunderstand the moment. The world is not ‘de-globalising;’ it is ‘re-globalising’ on strategic terms. International trade continues to expand and multinational firms remain deeply embedded in global value chains. What has changed is the organising principle. The first wave of globalization rewarded efficiency and scale; the next is likely to reward resilience, trusted partnerships and strategic diversification. Friend-shoring, near-shoring, China+1 and the shift from just-in-time to just-in-case production are not signs of globalization’s retreat but evidence that globalization is being fundamentally rewritten. Supply chains are not disappearing; they are being rewired around trust, resilience and strategic alignment. Economic openness is giving way neither to protectionism nor autarky, but to a more selective form of integration. Every transformation of the global economy reshapes the hierarchy of opportunity. The present one may prove unusually favourable to India. As multinational firms diversify production networks and governments increasingly favour trusted partners, India is well placed to emerge not merely as an alternative manufacturing destination but as a pivotal node in resilient global supply chains. Advantage India Its advantages extend beyond labour costs to a large domestic market, democratic institutions, strategic autonomy, a rapidly expanding digital economy and a central position in the Indo-Pacific. In an age where geopolitical trust has become an economic asset, these strengths constitute a strategic advantage. New Delhi’s response reflects an awareness of this shift. Rather than relying on market liberalisation alone, it has increasingly focused on building industrial capability. The Production Linked Incentive (PLI) programme across fourteen strategic sectors, together with the India Semiconductor Mission, PM Gati Shakti and the National Logistics Policy, aims to strengthen manufacturing competitiveness, logistics and technological capacity. At the same time, leadership in semiconductors, artificial intelligence, quantum technologies, biotechnology, space and clean energy is becoming central not only to economic growth but also to strategic influence. Modern mercantilism is no longer about protecting industries but about building capabilities. Industrial capability, however, cannot flourish behind closed borders. That explains New Delhi’s renewed emphasis on trade diplomacy. The Comprehensive Economic Partnership Agreement with the United Arab Emirates, the Economic Cooperation and Trade Agreement with Australia, and the recently concluded free trade agreements with the United Kingdom, the European Union and New Zealand, alongside negotiations with the United States and the Gulf Cooperation Council, reflect an approach best described as strategic openness. India is seeking deeper integration with global markets while preserving policy space in sectors vital to long-term resilience. The objective is to become a trusted manufacturing, technology and supply-chain partner in an increasingly fragmented global economy. That said, global manufacturers continue to point to land acquisition, regulatory complexity, logistics costs and judicial delays as obstacles to large-scale investment. Competing with established manufacturing ecosystems will require sustained reforms in infrastructure, education, research, innovation and ease of doing business. India’s emergence as a pivotal player in the next phase of globalization will ultimately depend on the consistency of these reforms. History nevertheless suggests that periods of global economic reordering often favour countries that adapt before others do. The redistribution of manufacturing after the Second World War transformed Japan, later South Korea and Taiwan, and eventually China. Today’s reconfiguration of supply chains may prove equally consequential. Countries that combine openness with resilience, innovation with industrial capability, and competitiveness with institutional credibility will shape the next chapter of globalization. India has the opportunity to be among them only if strategic ambition is matched by sustained execution. Adam Smith taught that wealth is created through markets. Kautilya understood that markets ultimately serve the interests of the state. The twenty-first century suggests that both captured part of the truth. Prosperity still depends on openness, competition and innovation, but enduring power increasingly belongs to nations capable of converting economic capability into strategic advantage. (The author is an alumnus of the University of Allahabad and a writer and analyst on international relations and strategic affairs. Views personal.)

Discover Kashmir's Most Magical Season

From the golden hues of autumn to a white winter wonderland, Kashmir transforms with every passing season

Nestled in the northernmost part of India, Kashmir is often described as “Paradise on Earth", a title that becomes instantly understandable the moment one sets foot in its valleys. Surrounded by the mighty Himalayas and the Pir Panjal ranges, the Kashmir Valley is blessed with snow-clad peaks, crystal-clear rivers, alpine meadows, dense forests, and picturesque lakes. Every season paints Kashmir in a different colour, but the period from October to March has its own magical charm. Though considered the low tourist season, it is one of the best times to experience the region peacefully, enjoy attractive hotel rates, and witness nature transform from the golden hues of autumn into a white winter wonderland.


As a tour leader, one of my most memorable journeys was leading a group of 35 enthusiastic travellers to Kashmir in October 2023. Organising a large group in the mountains always comes with challenges, from coordinating transport along winding roads to ensuring everyone experiences the destination comfortably. Yet, the smiles on everyone’s faces made every effort worthwhile. Watching our group marvel at the colourful Chinar trees, sip steaming Kashmiri Kahwa in the crisp mountain air, and enjoy conversations with local families created unforgettable memories. The warmth and hospitality of the Kashmiri people, their genuine smiles, welcoming nature, and eagerness to share stories of their homeland added a special emotional connection to the journey.


Historically, Kashmir has been a crossroads of cultures, religions, and civilisations. Ancient Hindu kingdoms flourished here before the arrival of Buddhism, which spread across Asia from this region. Later, Islamic rulers shaped much of Kashmir’s cultural identity while preserving many artistic traditions. This rich blend of influences is reflected in its architecture, cuisine, handicrafts, and customs. The terraced Mughal Gardens along the banks of Dal Lake continue to showcase timeless Persian-inspired landscape design.


Kashmir is equally significant for its spiritual heritage. The ancient Shankaracharya Temple, perched atop a hill overlooking Srinagar, is one of the oldest temples dedicated to Lord Shiva and offers panoramic views of the city and Dal Lake. The revered Kheer Bhawani Temple, dedicated to Goddess Ragnya Devi, attracts thousands of devotees each year. Together, these sacred sites reflect Kashmir’s deep-rooted spiritual traditions alongside its diverse cultural heritage.


No visit to Kashmir is complete without experiencing the world-famous Gulmarg Gondola, one of the highest cable cars in the world. Rising above snow-covered slopes and dense pine forests, it offers breathtaking views of the surrounding Himalayan peaks. During winter, Gulmarg transforms into one of Asia’s finest skiing destinations, while in October its lush green meadows gradually give way to golden landscapes, creating stunning photographic opportunities.


The scenic valleys of Kashmir each possess their own distinct character. Pahalgam enchants visitors with flowing rivers, pine forests, and peaceful countryside. Betaab Valley, named after the famous Bollywood film, is surrounded by towering mountains and crystal-clear streams. Aru Valley offers tranquil landscapes for nature lovers, while Sonamarg welcomes visitors with magnificent glaciers, alpine meadows, and spectacular mountain vistas.


Beyond the popular attractions lie Kashmir’s lesser-known treasures. The pristine meadows of Doodhpathri, the untouched beauty of Yusmarg, and the serene landscapes of Gurez Valley provide perfect escapes for travellers seeking peace away from the crowds.


Food forms another memorable chapter of every Kashmiri journey. Traditional dishes such as Rogan Josh, Yakhni, Gushtaba, Dum Aloo, and Haak reflect the region’s rich culinary heritage. Freshly baked breads from local bakeries, accompanied by fragrant Kahwa infused with saffron, almonds, and spices, offer comfort during chilly mornings. Every meal is prepared with remarkable care, making dining an experience rather than a necessity.


Equally fascinating are Kashmir’s traditional crafts. Intricately woven Pashmina shawls, hand-knotted carpets, walnut wood carvings, papier-mâché art, and exquisite saffron represent centuries-old craftsmanship passed down through generations. Visitors often return home carrying not just souvenirs but pieces of Kashmir’s artistic soul.


As tourism continues to flourish, excitement about travelling to Kashmir has never been greater. Improved connectivity, enhanced infrastructure, and positive travel experiences have encouraged families, photographers, honeymooners, adventure seekers, and senior citizens alike to explore this enchanting destination. Whether cruising on a Shikara across Dal Lake, walking beneath vibrant Chinar trees, riding the Gulmarg Gondola, or simply enjoying the silence of snow-covered mountains, Kashmir leaves every visitor spellbound.


October to March offers travellers a rare opportunity to witness Kashmir in its most intimate and magical form. Fewer crowds, attractive prices, vibrant autumn colours, and enchanting snowfall combine to create an unforgettable holiday. Every journey to Kashmir is more than a vacation—it is an experience filled with natural beauty, rich heritage, warm hospitality, and cherished memories that continue to call travellers back to this Himalayan paradise.


(The writer is a tourism professional and runs a company, Global Voyages. She could be contacted at goglobalvoyages@gmail.com. Views personal.)

Comments

bottom of page