What are the challenges before the Indian economy when the world is moving away from free trade and multilateralism to protectionism and bilateralism? How can these challenges be met?

Introduction

The post-war multilateral trading order is fraying: the WTO's appellate mechanism is paralysed, and major economies are turning to tariffs, industrial subsidies, friend-shoring and bilateral deals—a shift from free trade toward protectionism and bilateralism.

Challenges for the Indian Economy

• Export uncertainty: rising tariffs and non-tariff barriers (carbon border levies like the EU's CBAM) threaten India's goods exports.
• Weakened multilateralism: a dysfunctional WTO reduces India's ability to defend market access and settle disputes.
• Supply-chain disruption: reshoring and 'China+1' create both risk and opportunity, but demand competitiveness.
• Investment and technology access may be constrained by export controls and bloc-based trade.

How These Challenges Can Be Met

• Deepen bilateral and regional trade deals: leverage the India-UAE CEPA, India-Australia ECTA and India-EFTA TEPA, and pursue the India-EU and India-UK FTAs.
• Boost competitiveness: PLI-led manufacturing, logistics reform (PM Gati Shakti), and ease-of-doing-business to attract 'China+1' investment.
• Diversify markets and leverage services and digital exports, where India is strong.
• Strengthen domestic demand and value chains while championing WTO reform and Global South coalitions.

Conclusion

By combining strategic FTAs with domestic competitiveness and reformed multilateralism, India can turn a protectionist world into an opportunity for resilient, diversified growth.