From Global to Local: Investing in the Age of Deglobalisation

Not too long ago, the world became more connected than ever before. Companies made products in one country, used parts from another, and sold them everywhere. This was the age of globalisation, and it changed how business worked. But now, things are shifting. Countries are focusing more on making things locally, protecting their supply chains, and putting national interests first. This trend is called deglobalisation. It’s changing the way economies grow—and bringing new ideas, sectors, and risks for investors to think about.

• Table of contents

• What is deglobalisation and why is it happening?
• The new world: Multipolarity and supply chain nationalism
• How India is placed in this new world
• Sectors likely to benefit
• Risks to consider

What is deglobalisation and why is it happening?

Deglobalisation refers to the slowing down—or in some cases, reversal—of global trade, investment, and supply chain integration. International collaboration and partnerships continue, but countries are working to reduce overdependence, especially in sensitive or strategic areas.

Some reasons behind this shift:

• Trade tensions: Countries have started to impose tariffs or restrictions on imports to protect their own industries.
• Pandemic lessons: COVID-19 revealed the risks of depending too much on one region for essential goods like medicines or electronics.
• Geopolitical tensions: Changes in global relations have made countries more careful about who they trade with and depend on.
• Need for security: Nations want to be self-reliant in critical areas like energy, food, and defence.

These changes have made companies and investors look for supply chain diversification, moving away from over-dependence on any one country.

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The new world: Multipolarity and supply chain nationalism

The world is no longer centred around just one or two powerful nations. Multiple countries are now shaping the global economy, paving the way for multipolarity.

Many countries are also focusing on supply chain nationalism. They want key products, such as semiconductors, energy, and defence equipment, to be made closer to home or in friendly nations. This has also led to friendshoring, where supply chains are moved to trusted partner countries. As these changes unfold, geopolitical investing themes are becoming more important. Investors now need to consider how global politics, trade alliances, and national priorities are influencing business strategies and market trends.

How India is placed in this new world

This evolving global landscape offers a potential opportunity for India. Many global companies are adopting a China+1 strategy—continuing operations in China while also expanding into other countries to reduce over-dependence on a single geography. India has emerged as a contender, supported by the following:

•  Alternative manufacturing base: India is attracting foreign investment as companies seek to diversify supply chains.
• Strong domestic market: A large population and growing middle class make India a key consumption-driven economy.
• Strategic partnerships: India is strengthening trade relations through bilateral and multilateral agreements.
• Self-reliance initiatives: Government programmes like “Make in India” aim to boost domestic manufacturing and reduce import dependence.

Together, these factors suggest that India could potentially play a meaningful role in global supply chain realignment. However, as with any evolving opportunity, investors should stay informed about policy developments, global trends, and sector-specific risks.

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Sectors likely to benefit

Several sectors in India are positioned to potential grow as the world shifts its focus from global to local.

• Defence: With rising global tensions and a push for self-reliance, the local defence industry is gaining attention and investment.
• Capital goods: As manufacturing picks up, demand for machinery, tools, and industrial equipment is rising.
• Logistics: Better roads, ports, and digital tracking are helping goods move faster and more efficiently within the country.
• Energy: Clean and secure energy is a key focus. Solar, wind, and green hydrogen are drawing investment.

These sectors align with deglobalisation investing trends and may offer long-term growth opportunities.

Risks to consider

While deglobalisation brings opportunities, it also comes with certain risks:

• Geopolitical shocks: Conflicts, sanctions, or diplomatic issues can affect trade and supply chains overnight.
• Policy changes: Unexpected shifts in trade or tax rules can impact businesses.
• Execution delays: While plans are in place, infrastructure and policy support must keep pace.

Investors need to stay alert to these risks and follow developments closely. Keeping an eye on friendshoring efforts and geopolitical investing themes will be key to managing these risks.

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Conclusion

Deglobalisation can mark a shift in how the world does business. These changes are part of larger structural shifts, or megatrends—long-term forces like deglobalisation, digitalisation, and demographic shifts that shape how economies evolve. Investing with these themes in mind—often called megatrend investing—can help investors align their portfolios with the future.