Trade, Markets Being Weaponised; US Driving Tariff, Deficit Narrative: Commerce Ministry Official
Global supply chains and capacities are over concentrated, and businesses are finding it difficult to focus on fundamentals, says Rajesh Agrawal.
The global trading order is under pressure, and markets and supply chains are being weaponised, said Rajesh Agrawal, special secretary of the Ministry of Commerce and India's chief negotiator for the US Bilateral Trade Agreement.
"We entered these talks much before reciprocal tariffs came in. Tariffs and trade deficits are part of the US administration's narrative. It should not come in the middle of our trade partnership," he said at the CII's Annual Business Summit on Thursday . "We are progressing well, and we'll be able to come out with good outcomes sooner than later."
"India wanted to follow a rule-based global trading order, but something went wrong," Agrawal said. "We've allowed the co-existence of non-market economies, and the WTO has failed to maintain a global trading order, causing market failure."
Agrawal said global supply chains and capacities are over concentrated, and businesses are finding it difficult to focus on fundamentals. "They increasingly feel the need to provide for global uncertainties and cover up for less diversification," he said. "Businesses in multiple geographies have prospered based on lack of transparency."
He noted that geopolitics is now a big part of trade, with markets and supply chains being weaponised. Still, India remains "well-poised amid challenges".
"We're growing to be a big market in the next two decades. At the same time, we're a decently big producer, not as big as China or the US, but still big," he said. "India is seen as a trusted partner, a friend to all. We're not part of any geopolitically-aligned ecosystem."
He said the majority of nations want to do trade, FTAs with India. Countries including Australia, UK, Chile, Peru, and Gulf nations are actively engaged. "The US hasn't been getting into a deal for a decade, but now they're looking at one with us."
He called for insulating supply chains and investing in critical resources and technological superiorities. "We need to leverage state support wherever needed—PLI schemes, IT hardware scheme are examples of government plugging gaps," Agrawal added.
