Introduction: From Gentle Commerce to Strategic Rivalry

Doux commerce, a concept popularised by Montesquieu in the 18th century, posits that economic interdependence through trade softens human behaviour and reduces conflict by raising the costs of war. This idea underpinned the post-Cold War era's optimism about globalisation, where expanding trade networks were expected to promote peace and cooperation among nations.

However, since the late 2010s, this assumption has been challenged by rising protectionism, strategic decoupling, and geopolitical rivalries. Trade is increasingly weaponised as a tool of national security rather than mutual benefit, reshaping global supply chains and international relations.

Philosophical Roots and Legal Frameworks Governing Trade

The doux commerce thesis argues that trade fosters peace by creating mutual economic dependencies. While this remains a philosophical notion, legal frameworks operationalise trade relations. In India, key statutes include the Customs Tariff Act, 1975 (tariff imposition), the Foreign Trade (Development and Regulation) Act, 1992 (export controls under Sections 5 and 6), and the Competition Act, 2002 (Sections 3 and 4 addressing anti-competitive practices).

Internationally, the World Trade Organization (WTO) and its agreements, especially the General Agreement on Tariffs and Trade (GATT) 1994, regulate tariffs and dispute settlement. India’s WTO commitments constrain its tariff policies and export controls, balancing national interests with global trade obligations.

Economic Indicators Reflecting the Shift in Global Trade Dynamics

• Global merchandise trade volume growth slowed to 1.7% in 2023, down from an average 3.5% over the previous decade (WTO, 2024).
• India’s merchandise exports rose 15% year-on-year to USD 447 billion in FY 2023-24 (Ministry of Commerce & Industry, India).
• Global average import tariffs have increased by 2.5 percentage points since 2018, reversing decades of tariff liberalisation (OECD Trade Policy Papers, 2023).
• The global semiconductor market, valued at USD 600 billion in 2023, is a focal point of export controls, notably by the US and China, disrupting supply chains (IC Insights, 2024).
• India’s Atmanirbhar Bharat initiative allocated INR 1.97 lakh crore (~USD 24 billion) in 2021 to boost domestic manufacturing and reduce import dependence (Union Budget 2021-22).

Key Institutions Shaping and Monitoring Global Trade

• WTO: Oversees global trade rules and dispute resolution mechanisms.
• DGFT (India): Regulates export-import policies and implements export controls.
• OECD: Provides data and analysis on trade policies and tariff trends.
• UNCTAD: Analyzes trade trends and their impact on development.
• IMF: Monitors global economic stability including trade imbalances.
• NITI Aayog: Advises the Indian government on trade and industrial strategy.

Why the Doux Commerce Assumption is Failing

The premise that economic interdependence guarantees peace is eroding due to several factors:

• Rising protectionism: Countries are increasing tariffs, export controls, and "Buy National" mandates, which have grown by 30% in government procurement tenders globally since 2020 (UNCTAD, 2023).
• Geoeconomic competition: Trade instruments are wielded as strategic tools to advance national security objectives rather than purely economic gains.
• Supply chain insecurity: The COVID-19 pandemic and geopolitical conflicts exposed vulnerabilities in over-centralised and single-source supply chains.
• Weaponisation of critical technologies: Semiconductors and critical minerals are now leveraged as geopolitical assets, with export restrictions disrupting global markets.

Consequently, economic ties are increasingly viewed as strategic liabilities rather than trust-building mechanisms.

Comparative Analysis: US Decoupling vs China’s Dual Circulation Strategy

Critical Gap: Overdependence and Vulnerabilities in Supply Chains

Despite rhetoric on economic interdependence, overreliance on single-source suppliers, especially in semiconductors and pharmaceuticals, creates asymmetric vulnerabilities. This undermines strategic autonomy and resilience, as disruptions in these sectors can cripple economies and security apparatuses. Policymakers often neglect these risks, focusing instead on trade volumes rather than supply chain diversification and security.

India’s Trade Policy Response and Strategic Autonomy

• India’s Atmanirbhar Bharat initiative aims to reduce import dependence by promoting domestic manufacturing with a budgetary allocation of INR 1.97 lakh crore (~USD 24 billion) (Union Budget 2021-22).
• India balances WTO commitments with strategic export controls under the Foreign Trade (Development and Regulation) Act, 1992.
• The DGFT plays a critical role in regulating trade policies aligned with national security interests.
• India’s increasing export volumes (15% growth in FY 2023-24) demonstrate resilience but also highlight the need for supply chain security.

Way Forward: Recalibrating Trade and Security Linkages

• Policymakers must prioritise diversification of supply chains, especially in critical sectors like semiconductors and pharmaceuticals.
• India should leverage multilateral forums like WTO to negotiate rules that accommodate strategic trade concerns without undermining global cooperation.
• Investments in domestic R&D and manufacturing capacity must be accelerated to reduce vulnerabilities.
• Trade policies should integrate national security assessments to balance openness with resilience.
• Enhanced coordination between economic and strategic agencies is necessary to align trade with foreign policy goals.

Jharkhand & JPSC Relevance

• JPSC Paper: Paper 3 (Economy and International Relations)
• Jharkhand Angle: Jharkhand’s mineral wealth and industrial base are critical in India’s strategic supply chains, especially for critical minerals used in technology sectors affected by global trade tensions.
• Mains Pointer: Discuss how Jharkhand’s resource endowments can contribute to India’s strategic autonomy and reduce import dependence in sensitive sectors.