New Delhi

India should undertake a thorough review of its existing free trade agreements, modernise its investment screening mechanisms and better align trade and industrial policies to navigate an increasingly fragmented global economic environment, according to a new policy report released on Wednesday.

The study, titled "Resilience in a Fragmenting World: India's Economic Relations with Great Powers", was prepared by Koan Advisory Group in collaboration with the Chintan Research Foundation, the Information Technology Industry Council and the Institute of Chinese Studies.

Drawing on consultations with policymakers, industry leaders and civil society representatives, the report examines India's economic engagement with both the United States and China and outlines strategies to strengthen the country's position amid shifting geopolitical and economic realities.

The report argues that India should move away from a reactive policy approach and instead pursue a long-term strategy based on carefully calibrated partnerships, stronger institutional coordination and clearly defined trade objectives.

A key recommendation is the comprehensive evaluation of India's existing free trade agreements (FTAs). According to the report, policymakers should assess whether these agreements have effectively improved exports, expanded market access and strengthened supply chains.

The authors note that while some FTAs have facilitated increased imports, they have not always generated corresponding gains in exports. In certain cases, they have also been used as routes for transhipment rather than genuine trade expansion.

Commenting on the findings, Shishir Priyadarshi said trade agreements should not be viewed as objectives in themselves but as tools to achieve broader economic goals.

He stressed the importance of understanding how each agreement contributes to market access, industrial growth and supply-chain resilience, particularly at a time when protectionist tendencies are increasing globally.

The report also recommends that India focus on securing stronger market access provisions in future trade negotiations, make greater use of bilateral investment treaties and actively engage with global institutions such as the World Trade Organization.

On relations with China, the study advocates replacing broad, geography-based investment restrictions with a more nuanced, sector-specific screening framework rooted in national security considerations.

Rather than pursuing blanket restrictions, the report suggests India should continue leveraging Chinese investment and technology in non-sensitive sectors while maintaining tighter controls in strategically important industries.

The authors argue that India's ambitions in areas such as electronics manufacturing, clean energy and advanced technologies remain closely linked to global supply chains that include Chinese components, expertise and capital.

As a result, they recommend a gradual approach aimed at reducing vulnerabilities without disrupting industrial growth or competitiveness.

Deep Pal, one of the report's authors, said India faces the challenge of balancing economic growth with national security concerns.

He argued that a more targeted investment framework would allow the country to address genuine security risks while continuing to benefit from productive investments that support manufacturing and technological development.

Beyond trade and investment, the report calls for stronger coordination between trade, industrial and taxation policies. It also recommends reviewing non-tariff measures such as Quality Control Orders, updating India's bilateral investment treaty framework and broadening policy consultations to include startups and smaller enterprises.

The study identifies emerging opportunities in sectors such as artificial intelligence, advanced computing and data infrastructure. It recommends expanding technology partnerships with the United States while also developing safeguards against potential disruptions arising from export controls and technology restrictions.

According to the report, growing geopolitical tensions, supply-chain disruptions and uncertainty surrounding the future of global trade governance make it essential for India to adopt a more strategic and selective approach to international economic engagement.

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The authors conclude that India will increasingly need to make deliberate choices about the sectors, markets and partnerships it prioritises in order to maintain economic openness while enhancing long-term strategic resilience.