{"id":370497,"date":"2026-08-27T20:29:44","date_gmt":"2026-08-27T14:59:44","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=370497"},"modified":"2026-08-27T20:29:44","modified_gmt":"2026-08-27T14:59:44","slug":"why-india-could-shape-the-next-global-financial-order","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/why-india-could-shape-the-next-global-financial-order\/","title":{"rendered":"Why India could shape the next global financial order"},"content":{"rendered":"

Source: <\/strong>The post \u201cWhy India could shape the next global financial orders\u201d has been created based on “Why India could shape the next global financial order\u201d <\/strong>published in \u201cThe Hindu\u201d on 27th July 2026.<\/strong><\/p>\n

UPSC Syllabus: GS 3- International Relations<\/strong><\/p>\n

Context:\u00a0 <\/strong>The international financial architecture<\/strong> consists of institutions, rules and practices that govern global capital and international finance. For decades, this architecture was largely dominated by the Global North<\/strong>, with institutions such as the International Monetary Fund (IMF)<\/strong> and the World Bank<\/strong> at its centre. Changing global economic power and the growing importance of emerging economies are now creating a more multipolar international financial order<\/strong>. India has the potential to play an important role in shaping this emerging order, particularly in the area of global green finance<\/strong>.<\/p>\n

Reason behind the existing international financial architecture being under strain<\/strong><\/h2>\n
    \n
  1. The traditional financial architecture was designed largely under the influence of the developed world and does not fully reflect the current distribution of global economic power<\/strong>.<\/li>\n
  2. The existing system is increasingly struggling to meet the huge financing requirements associated with the Sustainable Development Goals (SDGs)<\/strong>.<\/li>\n
  3. The escalating climate crisis<\/strong> has created an additional need for large-scale and accessible climate and green finance.<\/li>\n
  4. Developing and emerging economies require greater financial resources to pursue development while simultaneously responding to climate change.<\/li>\n
  5. Therefore, there is a need to reshape global financial institutions and practices according to the changing needs of the global economy<\/strong>.<\/li>\n<\/ol>\n

    Emergence of a multipolar global financial order<\/strong><\/h2>\n
      \n
    1. The international financial system is no longer the exclusive preserve of Western powers.<\/li>\n
    2. The rise of China, Brazil and India<\/strong> has increased the economic and political weight of emerging economies.<\/li>\n
    3. Their growing influence is introducing new perspectives into global economic governance.<\/li>\n
    4. The emerging order is therefore becoming increasingly multipolar<\/strong>, with greater scope for emerging economies to influence global financial rules and institutions.<\/li>\n<\/ol>\n

      Changing role of traditional global powers<\/strong><\/h2>\n
        \n
      1. The transformation is also being accelerated by a perceived withdrawal of traditional leaders, particularly the United States, from important global commitments<\/strong>.<\/li>\n
      2. This includes commitments relating to the Sustainable Development Goals, the UN Framework Convention on Climate Change (UNFCCC) and the Paris Agreement<\/strong>.<\/li>\n
      3. Such developments have created greater space for other major economies to provide leadership on global development and climate-related issues.<\/li>\n
      4. This changing leadership landscape can accelerate the transition towards a more diversified global financial order.<\/li>\n<\/ol>\n

        Importance of green finance in the emerging order<\/strong><\/h2>\n
          \n
        1. The achievement of the SDGs<\/strong> requires enormous financial resources, particularly in developing countries.<\/li>\n
        2. Climate change has further increased the requirement for investment in sustainable and climate-resilient development<\/strong>.<\/li>\n
        3. The international financial system therefore needs to mobilise greater capital towards green and sustainable projects<\/strong>.<\/li>\n
        4. Green finance can help reconcile the twin objectives of economic development and environmental sustainability<\/strong>.<\/li>\n
        5. The restructuring of international finance provides an opportunity to make global capital flows more responsive to the climate and development requirements of emerging economies.<\/li>\n<\/ol>\n

          Ways in which India can shape the next global financial order<\/strong><\/h2>\n
            \n
          1. Greater representation of the Global South<\/strong><\/li>\n<\/ol>\n
              \n
            1. India can use its growing economic and diplomatic influence to advocate for a financial architecture that gives greater voice to developing and emerging economies<\/strong>.<\/li>\n
            2. It can push for international institutions to better reflect the contemporary distribution of global economic power.<\/li>\n<\/ol>\n
                \n
              1. Leadership in global green finance<\/strong><\/li>\n<\/ol>\n
                  \n
                1. India can position itself as an important leader in designing mechanisms for global green finance<\/strong>.<\/li>\n
                2. It can advocate for greater availability of climate finance for developing countries.<\/li>\n
                3. India can help ensure that the transition towards a green economy does not undermine the developmental priorities of emerging economies<\/strong>.<\/li>\n<\/ol>\n
                    \n
                  1. Bridging development and climate objectives<\/strong><\/li>\n<\/ol>\n
                      \n
                    1. India occupies an important position because it has to pursue rapid economic development while also addressing climate change.<\/li>\n
                    2. Its experience can help build financial mechanisms that combine developmental needs with climate action<\/strong>.<\/li>\n
                    3. India can therefore contribute to making global green finance more relevant to the realities of developing economies.<\/li>\n<\/ol>\n
                        \n
                      1. Strengthening a multipolar financial system<\/strong><\/li>\n<\/ol>\n
                          \n
                        1. India can work with other emerging econ<\/strong>omies such as China and Brazil<\/strong> to promote a more inclusive international financial architecture.<\/li>\n
                        2. Greater participation of emerging economies can make global financial governance more representative and responsive.<\/li>\n
                        3. India can contribute to moving the system from a predominantly Global North-led model towards a more balanced multipolar framework<\/strong>.<\/li>\n<\/ol>\n
                            \n
                          1. Using its growing global influence<\/strong><\/li>\n<\/ol>\n
                              \n
                            1. India\u2019s increasing economic and political importance gives it greater ability to influence international discussions on finance, development and climate change.<\/li>\n
                            2. This provides an opportunity for India to move beyond being a recipient of global financial arrangements and become a rule-shaper in the emerging global financial system<\/strong>.<\/li>\n<\/ol>\n

                              Key challenges<\/strong><\/h2>\n
                                \n
                              1. The transition towards a multipolar financial architecture may face resistance from established powers and institutions<\/strong>.<\/li>\n
                              2. Differences in the priorities of developed and developing countries can complicate the creation of common financial mechanisms.<\/li>\n
                              3. There is a continuing challenge of mobilising sufficient finance for the SDGs and climate action<\/strong>.<\/li>\n
                              4. Developing economies need access to finance without compromising their developmental priorities<\/strong>.<\/li>\n
                              5. The effectiveness of India\u2019s leadership will depend on its ability to build coalitions with other emerging and developing economies.<\/strong><\/li>\n<\/ol>\n

                                Way Forward<\/strong><\/h2>\n
                                  \n
                                1. International financial institutions should become more representative of the changing global economic balance<\/strong>.<\/li>\n
                                2. Greater financial resources should be mobilised for the SDGs and climate action<\/strong>.<\/li>\n
                                3. Emerging economies should receive a stronger role in determining the rules and priorities of global financial governance.<\/li>\n
                                4. Green finance mechanisms should address both climate requirements and developmental needs<\/strong>.<\/li>\n
                                5. India should work with other countries of the Global South<\/strong> to promote a more inclusive, sustainable and multipolar financial architecture.<\/li>\n<\/ol>\n

                                  Conclusion: <\/strong>The global financial order is moving from a predominantly Global North-dominated architecture towards a more multipolar system<\/strong>. The rise of emerging economies and the changing commitment of traditional powers are accelerating this transformation. India, with its growing global influence and its position between the developmental and climate imperatives, can play a vanguard role in shaping global green finance<\/strong>. A more representative international financial architecture can help align global capital with the twin goals of sustainable development and climate action<\/strong>.<\/p>\n

                                  Question:<\/strong> The global financial architecture is undergoing a shift towards a more multipolar order. Discuss the factors behind this transformation and examine how India can shape the emerging global financial order, particularly in the context of green finance.<\/p>\n

                                  Source: <\/strong>The Hindu<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

                                  Source: The post \u201cWhy India could shape the next global financial orders\u201d has been created based on “Why India could shape the next global financial order\u201d published in \u201cThe Hindu\u201d on 27th July 2026. UPSC Syllabus: GS 3- International Relations Context:\u00a0 The international financial architecture consists of institutions, rules and practices that govern global capital… Continue reading Why India could shape the next global financial order<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[216,239,10498],"class_list":["post-370497","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-gs-paper-3","tag-international-relations","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/370497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=370497"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/370497\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=370497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=370497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=370497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}