US–India collaboration crucial in new global economic era, says McKinsey’s Gautam Kumra

The US and India are set to play pivotal roles in the emerging global economic order, and deeper collaboration between the two countries is essential, Gautam Kumra, Senior Partner and Chair, Asia (ex-China) at McKinsey, said, even as he cautioned against viewing any single trade deal as a panacea.

Kumra said that while expectations around a potential US–India trade agreement remain high, predicting its timing or final shape is difficult. “Fundamentally, I believe that the US and India are two very important players in the new era. There certainly need to be more collaboration opportunities, and I hope the deal does happen,” he said. However, he added that trade agreements have become increasingly fragile, with policy reversals, tariffs and new restrictions often emerging even after deals are signed.

Against this backdrop, Kumra said India should treat the current moment as an opportunity to broaden its global engagement. “It’s not just about the EU and the US, which are obviously significant,” he said, stressing the need for India to build alignment with a wider set of partners. A more open and diversified approach to global trade and diplomacy, he noted, would help India navigate rising geopolitical and economic uncertainty.

Kumra’s comments come as he outlined a broader shift in the global economy away from the conditions that defined the past three decades. “The last 30 years were an era of markets, low interest rates, a unipolar world and abundant liquidity, with global trade benefiting most economies,” he said. While globalization delivered substantial gains, it also resulted in growing inequality.

He said the current phase is markedly different, with the global order moving towards a bipolar or tripolar structure. High interest rates, sticky inflation and heightened geopolitical tensions have made cross-border commerce more complex. “Friends have turned into competitors or even adversaries, and it is no longer clear what striking a trade deal really means,” Kumra said.

Looking ahead, Kumra outlined two potential paths for the global economy. One scenario involves a more diversified world where trade patterns shift but remain broadly open. The other points to a fragmented, regionalised system in which capital and trade flows become increasingly constrained.

Despite these challenges, Kumra said global trade continues to grow by around $1 trillion annually. Over the next decade, he expects $12 trillion to $14 trillion of trade to be rewired as supply chains and routes change. Asia, he said, is likely to benefit from this restructuring, with trade corridors linking India to Southeast Asia, the Middle East, Japan and the European Union expected to expand.

For India, Kumra said the changing global landscape also underscores the need for renewed domestic reform. “This crisis is teaching us that we need to take our destiny more in our own hands,” he said, calling for the next wave of reforms at both the central and state levels to strengthen India’s global position.