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)

- 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
As the global economy shifts from free trade and multilateralism toward protectionism and bilateralism, India faces new challenges in sustaining export growth, investment flows, and global competitiveness.
Body
1. Key Challenges:
- Export Uncertainty: Trade barriers and tariffs in the U.S. and EU markets affect India’s textile, pharma, and IT sectors.
- Supply Chain Disruptions: “Friend-shoring” and regional blocs reduce India’s access to global value chains.
- Investment Risks: Reduced global cooperation affects FDI inflows and technology transfers.
- WTO Paralysis: Weak multilateral institutions limit India’s ability to defend its trade interests.
- Agriculture and MSME Vulnerability: Dependence on open markets makes these sectors sensitive to global shocks.
2. Strategies to Address Challenges:
- Diversify trade through FTA negotiations (e.g., with UAE, EU, ASEAN).
- Strengthen domestic manufacturing under Make in India and PLI schemes.
- Promote regional value chains, digital exports, and self-reliance with competitiveness.
Conclusion
India must adapt to a protectionist world by combining strategic trade diplomacy with domestic capacity building, ensuring resilience and sustained global integration.