The Ministry of Finance has warned that “rising geopolitical tensions and the potential reintroduction of protectionist measures in response to global overcapacity serve as headwinds to trade growth,” even as India continues to show strong economic momentum.

The caution comes in the government’s Monthly Economic Report for September 2025, which highlights both global uncertainties and India’s domestic resilience. Advertisement

According to the report, trade policy uncertainty has reached unprecedented levels. The Trade Policy Uncertainty (TPU) Index surged 386.4% year-on-year in Q3 2025 — the second-highest reading since 1960, underscoring volatility in global trade policy.

Although the index fell 32% quarter-on-quarter as negotiations advanced and supply chains adjusted, the report ca

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