The idea of the “most-favoured nation” needs a rethink if multilateral institutions are not proving effective in the changing dynamics of world trade, finance minister Nirmala Sitharaman said on February 27.
Bilateral arrangements are the new reality of global trade, Sitharaman said, adding the contribution of multilateral institutions is “fading away”.
"The contribution of multilateral institutions is fading away. Bilateralism is now a reality. Trade is being refashioned… Bilateral arrangements are going to be the order in trade," Sitharaman in keynote address at the BS Manthan Summit.
The comments come at a time when India is pursuing bilateral trade agreements with various nations.
India and the United States have set an ambitious goal to double their bilateral trade to $500 billion by 2030. During Prime Minister Narendra Modi’s recent visit to the US, the two countries announced plans to finalise a mutually beneficial trade agreement soon.
India and the United Kingdom, too, have agreed to accelerate negotiations to finalise a free trade agreement and an investment treaty.
In March, India and EU will be holding a tenth round of talks for an FTA even as a European Union delegation begins two-day India visit.
Sitharaman underscored the need for India to invest in technology and leverage its talent pool to gain a competitive edge. "In matters of technology, India can be a leader on many aspects as we do it on a population scale. India can lend a hand to the global tech group on this," she added.
Highlighting a shift in global mobility patterns, the minister said the movement of people is no longer seen as a threat but is undergoing a transformation. “We are looking at a totally different world, which is coming sooner than expected. We have to meet the expectations of an aspirational middle class,” she said.
Stressing the new for fiscal discipline, the finance minister said debt management and fiscal prudence couldn’t be overlooked. She once again urged states to go for economic reforms. “Reforms cannot be an agenda only for the Union, but also for states. Investors should feel attracted to go to states,” she said.
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