Newer markets have to emerge to drive global trade growth: S&P Global’s Rahul Kapoor

ANI

Mumbai, June 30, 2025 (ANI): S&P Global’s Rahul Kapoor said, “The geopolitical landscape has changed and that’s become essential to what’s happening with Global trade now…there have to be newer markets which have to emerge to drive the global trade growth”

Transcript

00:00There are two takeaways that I'd like to share today.

00:02One is that electrification and the direct use of renewable is a critical part of energy transition for the power market.

00:10Second is that looking into our long-term outlook from now to 2050,

00:15because of the cost decline and policy support that we see all over the world,

00:20that the capacity additions of renewable, so that's wind and solar plus battery,

00:27is going to account for 96% of the net capacity additions,

00:32so that's a very significant amount of investment that we're expecting from renewable resources.

00:39We are here at the S&P Global Mumbai Forum,

00:42and what I was essentially talking about was what's happening with global trade.

00:46If you look at what our view is, the geopolitical landscape has changed,

00:50and that's become essential to what's happening with global trade now.

00:53And the traditional supply chain economist, as well as traditional supply chain analysis,

00:58has mostly focused on input, your labor costs, your energies, and so on,

01:02but now geopolitics has become a critical part of it.

01:05So whenever somebody's planning in terms of the long-term gestation of how the global trade would evolve,

01:10you will have to take into account what's happening with the geopolitical landscape,

01:14what's happening with the global tariffs, and so on.

01:16So that was the key thing which we talked about.

01:19We get a lot of questions from our clients talking about what's happening with globalization.

01:23Our view is globalization has certainly peaked, particularly for the east-west trades, right?

01:28And the second thing is there will have to be newer markets which will have to emerge to drive the global trade growth

01:33to the same level which we've seen over the last several years, or at least for the last two decades.

01:37Unlikely in that view, because the east-west trade, which is primarily north Asia to the European markets,

01:44to the American markets, that is certainly peaked.

01:47And the global trade growth multiples compared to the global GDP continue to compress.

01:52So that's the key thing which we were highlighting to our clients here this morning.

01:56When we think about this world today, it's a world of uncertainty.

01:59It's a world where governments and policymakers, but as well companies, have to make decisions about long-term investments.

02:08Dealing with uncertainty is becoming central.

02:12So at S&P Global, we have taken an approach, or we have an approach based on scenarios.

02:19And what we are seeing here is that in the three scenarios that we have, plus our base case,

02:28one of the things that we see more dominant, and I was sharing with people today,

02:33was that fossil fuels will continue to be very important in that story.

02:38It's going to be the coexistence of fossil fuels continuing to play a key role,

02:43combined with a clear advance, as well, of clean technologies in the mix.

02:49Because when we look at the energy transition and we analyze if the energy transition has accelerated,

02:56is it slowing down, has it happened, is it not happening,

03:00what our data says is that basically it is happening.

03:04It is happening at a slower pace than what we would like, but it's still happening.

03:11And then one thing, when we focus more specifically on India,

03:15what is important to highlight is two things.

03:19In India, the story is going to be about renewables.

03:23Renewables are going to be capturing most of the growth,

03:27are going to deliver most of the new electricity that is going to be required.

03:32However, coal is going to continue to be very resilient.

03:36Coal is here, is part of the mix,

03:38and will continue to play a key role in order to provide the flexibility that the system needs.

03:45That said, in all the scenarios,

03:48excepting the most aggressive ones on energy transition,

03:51will result in India seeing an increase of its emissions.

03:56That, in the case of one of the scenarios, is going to be quite significant.

04:01So, more to do, homework to do, more renewables to be built,

04:06and an acceleration of the energy transition that will come with some challenges,

04:11but as well with a lot of opportunities.

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