'Multilateralism fading, India needs to ramp up bilateral relations': FM Sitharaman on trade strategy

India needs to ramp up its bilateral relations for trade, investment and boosting strategic relations in the new global order, Union finance minister Nirmala Sitharaman said on Thursday.

Speaking at Business Standard's annual summit ‘Manthan’, Sitharaman the government is making all efforts to make India move up the ladder and be an engine of global growth in the “very interesting yet challenging” times.

"Bilateralism is now taking the top of the agenda... It is for us to ramp up our bilateral relations with many countries, not just for trade, not just for investment, but also for strategic relations. So multilateralism, sort of, out, I'm still saying with a qualifying word 'sort of out', but bilateralism is very much your only catalytic tool that you can use," she said.

She observed that multilateral institutions such as the World Trade Organization (WTO) are becoming less effective, and global trade is shifting away from concepts like Most Favoured Nation (MFN) status.

The minister said that every country wants to be treated special, and every country wants to be sure that the special treatment that they get is not by default.

"So if the WTO is getting weakened or multilateral institutions are not being effective... bilateral arrangements are going to be the order of the day in terms of trade," she said.

Asserting that global trade is undergoing a complete reset, she said, "the terms and references with which all of us played trade, with some kind of an anchor in the World Trade Organization are no longer available."

India has initiated bilateral trade talks with many nations including the resumption of free trade agreement discussions with the UK.

The two sides have committed to a "balanced, mutually beneficial, and forward-looking" agreement, according to a joint statement issued on Monday.

India is planning a bilateral trade agreement with the US.

Last week, Union minister Piyush Goyal said that the proposed bilateral trade pact between India and the US will be the "mother of all deals" that will provide huge opportunities for Indians and Americans to work together

"... we will soon start discussing with the Trump administration of the US a strong, powerful economic engagement and a bilateral trade deal which will be the mother of all deals providing huge opportunities for Indians and Americans to work together and complement each other's strengths in this very turbulent world," Goyal had said.

India is also in discussion with the 27-nation grouping -- the European Union, for a free trade pact.

"I think these are very interesting yet challenging times... India has to make a meaningful contribution to the global reset, as much as continuously make all the efforts to make India move up the ladder, both in terms of per capita income, and also in terms of a business destination, where talent can move, investors can move for the global good... we can be the engine of the global growth," Sitharaman said.