Bilateral arrangements taking over multilateralism: Finance Minister, Pg 14

Rise of Bilateralism Amid Global Fragmentation

• Finance Minister Nirmala Sitharaman stated that countries are prioritising bilateral arrangements due to rising global uncertainties and ineffectiveness of multilateral institutions.

• She emphasized that bilateralism provides strategic clarity, avoids ideological blocs, and aligns with national interests.

Context of U.S. Tariffs & India-UK Trade Talks

• Sitharaman denied that U.S. tariff hikes (10%-26%) had accelerated India-U.K. trade talks.

• She noted that India-U.K. negotiations had been underway for a long time and were not a reaction to the U.S. actions.

Pitch for GIFT City

• Sitharaman promoted GIFT City as a financial services hub, citing its regulatory environment and potential for foreign investment.

• Engagements included discussions with U.K. institutions on education, investment, and campus expansion in India.

Implications of Trump’s Trade Actions

• Described Trump’s tariff moves as part of a “new era” of bilateral trade protectionism, emphasizing the need for countries to “speak with a certain voice” on global issues.

Analysis & Way Forward

• Reflects India’s strategic pivot toward bilateralism for economic security and policy stability.

• India must strengthen diplomatic agility and maintain a balance between regional partnerships and global multilateral platforms.

Mains Mock Question:

"With global trade witnessing increased fragmentation, evaluate the implications of India’s growing preference for bilateral trade agreements over multilateral frameworks."