WTO warns India's non-aligned trade strategy may face higher costs as blocs solidify
The WTO’s 2026 trade report cautions that countries like India, which stay outside major blocs, could see rising tariffs and non-tariff barriers unless they secure more free-trade agreements.
The World Trade Organization’s 2026 report presents a “geo-fragmented world” scenario where trade costs rise sharply between western and eastern blocs and also affect non-aligned economies that lack free-trade agreements. India, not classified as non-aligned in the report, is pursuing a broad FTA strategy, highlighted by a landmark deal with the European Union and additional pacts with the UK, Australia, EFTA and Gulf partners.
Despite record exports of $863.1 billion in FY26, India still relies on the United States for exports and on China for imports, creating a tension between diversification and bloc-based cost pressures. The WTO notes that non-tariff measures such as security rules and data restrictions can amplify fragmentation, threatening India’s goal of integrating into global supply chains. At the recent BRICS summit, the bloc voiced opposition to unilateral trade restrictions, underscoring the geopolitical stakes. The report suggests that staying strategically autonomous may require India to multiply its FTAs to offset rising costs from a divided trade system.
Why it matters
India's ability to keep trade costs low while staying neutral affects global supply chains and the price of goods worldwide.
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