Why India Could Be the Biggest Winner of Global Trade Shifts McKinsey Asia insights

Описание: According to McKinsey Asia insights from early 2026 and late 2025, India is positioned as a primary beneficiary of the "Great Trade Realignment." McKinsey highlights that as global trade corridors rewire—with an estimated $12 trillion to $14 trillion in trade expected to shift by 2035—India’s unique combination of domestic scale and geopolitical positioning makes it a "global connector."

The following factors explain why India is emerging as a top winner:

1. The "Global Connector" Advantage
Unlike many economies that are narrowing their trade to "geopolitically close" partners (friend-shoring), India has maintained a stable "geopolitical distance" in its trade.

Broad Engagement: India continues to trade across the geopolitical spectrum, increasing exports to the US and Europe while maintaining critical resource flows from other regions.

Corridor Growth: McKinsey identifies India as a central hub in some of the world's "safest" and fastest-growing trade corridors, specifically those linking India to Southeast Asia, the Middle East, and the EU.

2. The "China + 1" Manufacturing Surge
As multinationals seek to reduce concentration risk in China, India is capturing a significant share of new Foreign Direct Investment (FDI).

Shift in FDI: While greenfield investment into China fell by nearly 70% compared to pre-pandemic averages, India has seen some of the largest leaps in pledged investments.

Future-Shaping Industries: FDI is increasingly concentrated in sectors India is aggressively courting, such as semiconductors, data centers, and EV batteries. For instance, India’s semiconductor industry is projected to grow to $100B–$120B by 2030 (a 15-17% CAGR).

3. Production-Linked Incentives (PLI) & Policy Modernization
McKinsey notes that India’s PLI schemes across 14 sectors are acting as a "renaissance" for its industrial base.

Auto Components: This sector alone is projected to reach $200 billion by 2030. India is capturing two major opportunities: the consolidation of the global Internal Combustion Engine (ICE) market and a 35% CAGR in domestic EV sales.

Trade Agreements: The recent conclusion of a major trade deal with the UK and advanced negotiations with the EU are expected to further lower barriers for Indian exports.

4. Resilient Domestic Demand
A critical differentiator for India is that its trade growth is underpinned by a massive, rising middle class.

The New Consumer Class: For the first time in history, Asia’s consumer class (those spending $12–$120/day) outnumbers its poor population. India's domestic market provides a "safety net" for manufacturers, allowing them to produce for both local consumption and global exports, reducing the risk of global demand volatility.

5. Challenges to Overcome
While the outlook is overwhelmingly positive, McKinsey identifies three hurdles India must clear to fully realize this "winner" status:

MSME Scaling: 40% of industry revenue comes from MSMEs that currently lack the economies of scale and technology to meet global standards.

Supply Chain Gaps: There are still significant gaps in local ecosystems for advanced components (e.g., rare earth elements and high-end electronics).

Infrastructure Costs: While improving, logistics costs in India have historically been higher than those in Southeast Asian competitors like Vietnam.

Summary Quote from Gautam Kumra (McKinsey Asia Chair, Jan 2026):

"India and Asia are at the heart of some of the safest corridors... the next decade will see a massive rewiring of trade, and India must take its destiny into its own hands through continued domestic reforms."

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