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

Protectionism, supply-chain weaponisation and bilateral trade deals are weakening predictable multilateral commerce.

Challenges for India

• Higher tariffs and non-tariff barriers can restrict exports, especially labour-intensive manufacturing.
• Trade diversion, subsidy races and friend-shoring raise input costs and fragment supply chains.
• Global uncertainty affects investment, jobs, foreign exchange and technology access.
• Small firms face compliance costs and weaker bargaining power in bilateral negotiations.

Response

• Deepen competitiveness through logistics, skilling, R&D, reliable power and quality standards.
• Diversify export destinations and integrate with resilient value chains while retaining strategic autonomy.
• Use WTO reform, regional agreements and calibrated bilateral FTAs with safeguards for sensitive sectors.
• Support MSMEs with trade finance, digital customs and technology upgrading.

Keywords: WTO, non-tariff barriers, friend-shoring, FTAs, supply-chain resilience.