April 10, 2025
She argued that multilateral institutions are struggling to address today’s complex challenges, prompting countries to seek more agile bilateral alternatives
The minister pointed out that bilateral arrangements are being shaped less by ideological affiliations and more by shared strategic and economic interests
Sitharaman believes bilateralism will remain prevalent until multilateral bodies are revitalised and can exert coherent influence
She dismissed suggestions that recent US tariffs on India and the UK were accelerating India-UK FTA talks, calling the negotiations long-standing and unrelated
Union Finance Minister Nirmala Sitharaman has underscored a growing international shift towards bilateral economic and trade partnerships, as traditional multilateral frameworks struggle to remain effective in a rapidly evolving geopolitical environment.
Speaking during a panel discussion at the Indian High Commission in London, alongside economist Professor Nicholas Stern of LSE and BJP leader NK Singh, Sitharaman observed that the world is becoming increasingly multipolar and fragmented. She remarked that the scale of global uncertainties is expanding rapidly, leaving countries with limited flexibility in crafting comprehensive policies under existing multilateral structures.
In this context, she noted that bilateral arrangements are emerging as a more agile and strategic alternative. Unlike the rigid affiliations of ideological blocs, these agreements offer nations the ability to align more directly on shared interests.
According to her, this trend towards bilateralism is likely to continue unless global institutions can regain their capacity to act with a unified and credible voice.
Responding to questions about recent global trade tensions, Sitharaman addressed speculation that India and the UK were being driven to fast-track their free trade agreement (FTA) talks in response to US tariffs. On April 2, President Donald Trump announced new duties on exports from both countries—26% on Indian goods and 10% on those from the UK.
She clarified that the FTA discussions between India and the UK are independent of the US measures. The agreement has been in development for a considerable time, including during the tenure of the previous Conservative government.
With the Labour government under Prime Minister Keir Starmer now also supporting the deal, Sitharaman expressed optimism about a timely conclusion to the long-pending FTA negotiations.
Source: CNBC