New Delhi, June 29 -- The movement of capital across countries is going through a tumultuous phase. Data released in mid-June by a United Nations body on trade and investment shows that global foreign direct investment (FDI), adjusted for probable conduit financial flows (or capital flows from one country, through an intermediate country), fell 11% in 2024, marking its second consecutive decline.

This year, US President Donald Trump has triggered a tariff war, which could have more ramifications on FDI. In his previous term, Trump dealt a blow to the functioning of the organisation that frames rules for global trade by blocking appointments to its dispute settlement body.

There are other triggers. The economic rivalry between the US and...