Trade deals that undermine multilateralism may hit growth and exports, govt economists warn
Indian Ministry of Finance economists warn that moving away from multilateral trade systems toward bilateral agreements could harm global GDP and exports. The report advocates for maintaining the WTO as the core of international trade.
Why it matters
It provides insight into India's economic policy stance regarding global trade fragmentation and the risks of protectionist trade blocs.
Economists in the Ministry of Finance have warned that bilateral and regional trade deals that seek to replace the current multilateral trade system could lead to “greater trade diversion, higher trade costs, and greater uncertainty”.
However, they also noted that while India was pursuing a diversified trade strategy, it was doing so within the multilateral trading system and still sought to have the World Trade Organization (WTO) at the core of such a system.
The Monthly Economic Review for September 2026, prepared by economists in the Department of Economic Affairs, cited the WTO’s recent report that sought to predict what would happen to the world economy by 2050 under three different trade-related scenarios.
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