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?(Answer in 150 words)

Introduction

The global economic order is witnessing a shift from free trade and multilateralism toward protectionism and bilateral trade arrangements. Developments such as trade wars, supply chain disruptions, and weakening of institutions like the World Trade Organization (WTO) pose significant challenges

for emerging economies like India.

Body

Challenges before the Indian Economy

• Reduced Export Opportunities: Protectionist tariffs and non-tariff barriers can restrict Indian exports in key sectors like textiles, pharmaceuticals, and IT services.

• Supply Chain Disruptions: Geopolitical tensions and economic nationalism may affect global value chains where India seeks integration.

• Weakening Multilateral Institutions: Reduced effectiveness of WTO dispute settlement limits fair resolution of trade conflicts.

• Competitive Bilateral Agreements: Preferential trade agreements among other countries may disadvantage Indian products.

Measures to Address the Challenges

• Diversifying Trade Partnerships: Strengthening bilateral and regional trade agreements with markets in Asia, Africa, and Europe.

• Enhancing Domestic Competitiveness: Initiatives such as Production Linked Incentive (PLI) schemes and Make in India can improve manufacturing capacity.

• Supply Chain Resilience: Participation in initiatives like the Supply Chain Resilience Initiative (SCRI) with partners such as Japan and Australia.

• Promoting Atmanirbhar Bharat: Building domestic capabilities while remaining integrated with global markets.

Conclusion

To navigate the changing global trade environment, India must adopt a balanced strategy combining

strategic trade partnerships, stronger domestic industries, and resilient supply chains

to sustain growth and economic stability.