India needs to ramp up bilateral relations for trade, investment: Nirmala Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman on Thursday said India needs to ramp up its bilateral relations for trade and investment, as the world is witnessing a churn, and bilateralism seems to be the new catalyst tool.

Speaking at BS Manthan, the Finance Minister said these are very interesting yet challenging times and the government is making all efforts to make India move up the ladder and be an engine of global growth.

"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.

Observing that multilateral institutions are increasingly fading away, she said, every attempt to revive them and energize them is not having the desired result.

"So, where you have to address issues which affect more than your own country. You have no more forums left which can effectively deliver... multilateral institutions and their contributions probably are fading away, at least in the near future, till an attempt is made to revive them with that kind of energy... It's not going to happen in the next few years," 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." There is no Most Favoured Nation (MFN) concept, she said, adding, every country wants to be treated special, and every country wants to be sure that 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.

Sensing the movement toward a new world, India has initiated bilateral trade talks with many nations including the UK and is planning a bilateral trade agreement with the US.

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

In the new global order, she said, India needs to ramp up its bilateral relations for trade, investment and boosting strategic relations.

With its technology and talent pool, the country can act as the engine of global growth in a new world order, she said.

"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," she said.

Talking about reforms, Sitharaman said, it is something which the government will continue to do in various areas including debt management and maintaining fiscal prudence.

"Reform cannot be just an agenda only of the union government, it has to be taken up seriously by every state government... I would want a competition among states, a healthy one, to say my economy is far better than the others," she said.