India is prioritising bilateral agreements in the face of growing global uncertainties and diminishing influence of multilateral institutions, Union Finance Minister Nirmala Sitharaman said on May 6.
Speaking on the sidelines of the Asian Development Bank (ADB) Annual Meeting in Milan, Italy, the Finance Minister pointed to recent geopolitical developments, particularly the tariff announcement by the United States in April, as accelerants of fragmentation in global trade.
“The global fragmentation and also the way in which the April tariff announcement by the US has panned out, uncertainties are increasing and simultaneously global institutions are not carrying the heft they were carrying earlier. In such a situation, countries are today looking at bilateral arrangements. I think there is no going back on globalisation, yet being cautious that our dependencies should be largely addressed through our own capabilities,” Sitharaman said.
India’s emphasis to bilateral trade was underscored by the successful conclusion of the Free Trade Agreement (FTA) with the United Kingdom, the first such deal following a significant shift in global trade policy post the US tariff impositions under President Donald Trump.
Prime Minister Narendra Modi, in a post on X tagging British Prime Minister Keir Starmer, welcomed the agreement as a “historic milestone” and confirmed the inclusion of a Double Contribution Convention as part of the deal.
He said the FTA would be “mutually beneficial” and extended an invitation to Starmer to visit India soon.
The comments come as India continues to intensify its bilateral trade negotiations, including with the European Union, which Sitharaman said remains a priority partner.
“In the case of EU, India has been negotiating for quite some time. But today, the sense of urgency is felt by both sides because the market can be one big market. So, you need to have investments in various countries, you need to have market access in different countries, and you need to have bilateral arrangements,” she said.
“Negotiation is about the art of making it possible. You need to have everything done to make it possible to achieve. But when there are fixed positions, someone will have to bring in the elasticity there.
So, it's not as if the world has not negotiated with one another. But it cannot be violative of the acceptable principles of free trade,” Sitharaman stated.
“Climate change doesn't respect borders. Heat travels everywhere, avalanches occur everywhere, and the sea rises everywhere. So, now if our collective effort is to get the world greener, we have to make it everywhere. And so, if some country thinks within my borders, I want it to be greener, and so I will deplete others, this kind of mentality I find to be a repetition of colonialism. This can no longer be the spirit with which international cooperation and trade can happen,” she said.
India-IFAD Engagement Deepens
Separately, the Finance Minister met with Alvaro Lario, president of the International Fund for Agricultural Development (IFAD), to discuss mutual cooperation in rural development, food security, and sustainable agriculture.
According to a post by the Finance Ministry on X, Sitharaman reaffirmed India’s four-decade-long partnership with IFAD and expressed commitment to deepening the engagement through inclusive and innovative strategies.
“India and IFAD discussed scaling up investments in natural farming, agro ecology, climate-smart tech, and inclusive value chains,” the post said.
Sitharaman also urged IFAD to strengthen support for low-income countries with a client-centric approach combining financial and technical assistance.
“Sitharaman also emphasised India's successful initiatives in poverty reduction, rural infrastructure and DPI as replicable models in the Global South via South-South Cooperation,” the post added.
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