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De-Risking is Better Than Decoupling


Globalization has reached a point where complete economic decoupling of a country or region is impractical. The way forward involves de-risking and realignment instead.


  • GS1- Effects of Globalization on Indian society.
  • GS2- Effect of Policies and Politics of Developed and Developing Countries on India’s interests, Indian Diaspora.

Mains Question:

Is economic decoupling of a country relevant in the present global scenario? Use illustrations to substantiate your argument. (15 marks, 250 words).

Economic Decoupling and Present Scenario:

  • The current world dynamic, highlighted by the Ukraine war and questions about the effectiveness of the United Nations, emphasizes that economic decoupling of a country or region is neither feasible nor justifiable.
  • Over the last two decades, globalization has become so entrenched that de-risking and realignment emerge as the only viable paths for nations to make economic progress.
  • Powerful nations openly express their intent to build economic resilience by diversifying partnerships and focusing on de-risking rather than decoupling.
  • Despite NATO’s efforts, Russia remains interconnected, trading within Asia, Europe, and Africa. Isolating one country disrupts trade and hinders overall development.
  • Future strategies should avoid isolating nations, particularly if the UN’s sustainable development goals are to be achieved.

Decoupling from China:

  • Recognizing that decoupling from China is challenging, there’s a growing acknowledgment of the need to de-risk economies vulnerable to China’s debt trap diplomacy.
  • While the U.S. treasury secretary admits that decoupling from China is nearly impossible, tit-for-tat tariff exchanges are seen more as protectionism than genuine decoupling.
  • China’s strategy involves “dual circulation,” exercising control over both external and internal trade, raising concerns about the global trade order and prompting discussions of decoupling.
  • Recognizing that decoupling from China is impractical, the West emphasizes the importance of de-risking.
  • Strategies for de-risking Global South economies involve building infrastructure, transferring technology, and promoting equitable policies.

Way Forward:

  • De-risking must extend to curbing China’s expansionist policies, both economically and in the realms of politics and society.
  • It should also restrict China’s access to advanced technology with military applications, spanning both economic and defense aspects.
  • India’s cooperative approach to mutually beneficial trade may gain global traction, particularly in Global South countries.
  • De-risking from China could be a significant step in this direction, aligning with India’s inclusive policy framework.
  • De-risking also involves addressing climate change by transferring technology to promote clean energy, benefiting not only individual nations but humanity as a whole.
  • Reducing over-reliance on exclusive Chinese products, especially concerning the transition to clean energy, is crucial.
  • Ensuring the safety of critical raw material supplies for green energy and preventing monopolistic tendencies are imperative for global well-being.


In this era, characterized by a need for common goals and shared interests, de-risking becomes essential for humanity to achieve sustainable development goals.

December 2023