RBI Bulletin: India must join larger trade deals, boost infrastructure to tackle global risks

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India should participate in larger trade agreements and invest more in port infrastructure to mitigate the risk of geopolitical shocks both global and domestic, which have become more pervasive, according to a paper published in the Reserve Bank of India’s monthly bulletin released on January 17.

“On the trade front, measures could include diversifying trade sources and participating in larger trade agreements, such as free trade areas (FTAs) and global trade blocs, to bolster resilience,” the researchers said.

They also argued for measures like building strategic buffers, forging bilateral swap agreements, and engaging with multilateral institutions to reduce geopolitical risk-related disruptions.

The study found that while India was less affected by a rise in geopolitical risk to the world, but the difference was only marginal.