A report advises India to reassess its FTAs, modernise investment screening, and coordinate trade policy to navigate global economic fragmentation. It suggests a calibrated approach to China, balancing strategic concerns with economic needs.
Reassessing India’s Trade and Investment Strategy
India should reassess the effectiveness of its existing Free Trade Agreements (FTAs), modernise its investment screening framework and adopt a more coordinated trade and industrial policy approach as geopolitical tensions and economic fragmentation reshape global commerce, according to a report by Koan Advisory Group in association with Chintan Research Foundation, Information Technology Industry Council and Institute of Chinese Studies.
The report, “Resilience in a Fragmenting World: India’s Economic Relations with Great Powers”, is based on a series of consultations involving policymakers, industry representatives and civil society stakeholders on India’s economic engagement with the United States and China.
The report argues that India must move beyond reactive policymaking and pursue a strategy centred on calibrated partnerships, stronger institutional coordination and clearly defined market access objectives.
Comprehensive FTA Audit Recommended
One of the key recommendations is for India to conduct a comprehensive audit of its existing FTAs to determine whether they have delivered intended outcomes in terms of exports, market access and supply chain resilience. The report notes that some trade agreements have contributed to rising imports without commensurate gains in exports, while others have become channels for transhipment.
“Trade agreements cannot be treated as ends in themselves. India needs a clearer understanding of what each agreement delivers in terms of market access, supply-chain resilience and industrial capacity. In a more uncertain and protectionist world, evaluating whether our FTAs have met their objectives becomes even more important,” said Shishir Priyadarshi, President, Chintan Research Foundation.
The report also highlights the need for India to secure greater market access through future trade agreements, utilise bilateral investment treaties more effectively and strengthen engagement with multilateral institutions such as the World Trade Organization.
Calibrated Engagement with China
On economic engagement with China, the report recommends moving away from broad geography-based restrictions towards a sector-specific investment screening mechanism grounded in national security considerations. It suggests that India should continue to utilise Chinese capital and technology in non-strategic sectors while strengthening safeguards in sensitive areas.
According to the report, India’s manufacturing ambitions in sectors such as electronics, clean energy and advanced technologies remain closely linked to global supply chains that include Chinese components and investment. It therefore advocates a phased strategy to reduce vulnerabilities rather than abrupt decoupling.
“India faces the dual challenge of reducing strategic vulnerabilities while sustaining manufacturing growth and competitiveness. That requires moving beyond blunt restrictions toward a more calibrated framework that distinguishes between legitimate national security concerns and economically productive investment,” said Dr Deep Pal, Director, Geopolitics and Policy at Koan Advisory Group and one of the report’s authors.
Broader Policy Reforms and Future Opportunities
The report further calls for better alignment between trade, industrial and tax policies, rationalisation of non-tariff barriers such as Quality Control Orders, modernisation of India’s Bilateral Investment Treaty framework and broader policy consultations involving startups and smaller businesses.
Focus on Emerging Technology and Partnerships
It also identifies opportunities in emerging sectors such as artificial intelligence and data infrastructure, recommending deeper technology partnerships with the United States and stronger safeguards against disruptive export controls.
The report says amid geopolitical disruptions, supply-chain pressures and uncertainty in global trade governance, India will need to make deliberate choices about the markets, sectors and partnerships it prioritises in order to balance economic openness with strategic resilience. (ANI)
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