Twenty three years after the liberalisation of its economy, India has finally reaped some benefits as the world looks flat for us, according to the Global Connectedness Index (GCI) 2014.
The GCI is an analysis of the state of globalisation around the world and is measured by cross-border flows of trade, capital, information and people.
The report, released by international private logistics company DHL, says India is more internationally connected than economic rivals like China, Brazil and Mexico, while Singapore scores as the most globally connected in Asia.
India ranks 71st out of 140 countries covered in the report followed by Brazil, China and Mexico, who sit in the 74th, 84th and 96th positions respectively. Its overall rank fell behind by 3 points as compared to the GCI in 2012, when it was ranked 68. Surprisingly, China, a robust economy that is a much bigger destination for global capital, is ranked 13 points behind India. China has also slipped by 6 points in its overall ranking in the 2014 index.
The Netherlands, Ireland, Singapore, Belgium and Luxembourg are the most internationally integrated countries in the world, in that order.
How is it measured?
The GCI measures the 'depth' and 'breadth' dimension of a country's global integration, that summarises a country's international versus domestic economic activities and international interactions respectively.
'Depth' of a country is measured by comparing international economic flows like exports to domestic components like GDP.
India ranks 126 out of 140 in the depth dimension in the 2014 index, better than Brazil and China, who rank 130 and 127 respectively.
'Breadth' of a country is determined by looking at how broadly an international component of economic activity, like inbound tourism, is geographically distributed across the countries.
India stands at 22 out of 140 countries in the breadth dimension, leading all its economic rivals, except Brazil which is ranked at 21.
Notably, India has improved by two ranks in the depth of dimension but has slipped by four ranks in the breadth dimension, since the 2012 index.
The graph above shows that the pace of international integration in India is not fast enough to match the economies of Singapore, Saudi Arabia, South Africa and Russia, though it is better placed than many other emerging economies.
The report says the domestic nature of the Indian economy is the reason of its slow pace. Moreover, the decrease in overall ranking owes to a loss in investment and movement of people across international borders, in the form of tourism, immigration and business travel.
In future, the biggest threat to globalisation is expected to come from policy mistakes and protectionist measures. Given that, a new land act and initiatives like Make in India may give the economy the necessary impetus to improve global standing.?