Global Trade Faces Rising Challenges, Says Nirmala Sitharaman

Finance Minister Nirmala Sitharaman recently addressed concerns over the increasing use of tariffs and trade barriers worldwide, warning that global trade is being weaponised. Speaking at a recent economic forum, she said it is “very clear” that international commerce is no longer free and fair, reflecting a shift toward protectionist measures.

Weaponisation of Trade Through Tariffs

The Minister emphasized that countries are increasingly using tariffs and trade restrictions as geopolitical tools, rather than merely for economic protection. These measures, she noted, are creating uncertainty for businesses, disrupting supply chains, and raising costs for consumers globally.

Key points highlighted by Sitharaman include:

1. Rising Tariffs: Several nations have imposed higher duties on imported goods to protect domestic industries, affecting global trade flows.

2. Trade as a Strategic Tool: Economic sanctions and selective trade barriers are increasingly being used to exert political influence.

3. Impact on Developing Economies: Countries like India, which rely on export markets, face challenges due to these protectionist measures.

4. Supply Chain Disruptions: Industries dependent on global supply chains are particularly vulnerable to tariff-driven trade disruptions.

India’s Stance on Global Trade

The Finance Minister reiterated India’s commitment to fair and balanced trade practices. While acknowledging the challenges posed by protectionism, India continues to advocate for:

• Multilateral cooperation via platforms such as the World Trade Organization (WTO)

• Reducing unnecessary barriers to facilitate smoother trade flows

• Supporting developing economies in accessing global markets fairly

Sitharaman’s remarks align with India’s broader trade policy aimed at promoting export growth, economic resilience, and self-reliance in key sectors.

Implications for Indian Businesses

Rising tariffs globally can have mixed effects on Indian businesses:

• Positive impact: Indian exporters may gain a competitive edge in markets where competitors face high tariffs.

• Negative impact: Tariffs on raw materials or intermediate goods increase production costs, impacting sectors like electronics, pharmaceuticals, and machinery.

• Strategic adjustments: Companies may need to diversify supply chains and explore new markets to mitigate risks from trade barriers.

Expert Analysis

Trade expert Dr. Raghav Mehta said:

“Sitharaman’s observation reflects a real challenge for global commerce. Tariffs are no longer just economic tools—they are increasingly political. India must navigate these waters carefully to ensure domestic industries remain competitive.”

Another analyst, Priya Sharma, added:

“For India, the focus should be on leveraging free trade agreements, expanding export markets, and boosting domestic manufacturing to offset global protectionist pressures.”

Conclusion

Finance Minister Nirmala Sitharaman’s warning about the weaponisation of global trade underscores the fragility of free trade in the current geopolitical climate. Rising tariffs and trade barriers challenge businesses worldwide, especially in developing economies. India continues to advocate for balanced, multilateral trade practices, while equipping its industries to thrive despite global uncertainties.

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