VAKRA: Evaluating Multi-Hop Reasoning Across APIs and Retrieval Under Tool-Use Policies

Agents deployed in enterprise settings must reason across structured APIs and document collections, yet existing benchmarks evaluate these capabilities in isolation. We introduce VAKRA (eValuating API and Knowledge Retrieval Agents), a benchmark of over 8{,}000 executable APIs across 62 domains with tasks spanning three settings of increasing difficulty: diverse API interaction styles, multi-hop reasoning over structured APIs, and multi-source reasoning with natural-language tool-use policy constraints. Correctness is verified by re-executing predicted tool calls against live APIs, accommodating multiple valid paths. Using a fixed ReAct harness to isolate model capabilities from agent architecture, we evaluate frontier and open-weight models and find that even the best model achieves only 70.4% on single-hop endpoint-style tasks and drops to 50--51% on compositional APIs; performance degrades by over 50% as reasoning depth increases, and policy-constrained questions expose severe failures (as low as 2.4% on unanswerable queries). Trace analysis shows failures concentrate at language-mediated reasoning - entity disambiguation, cross-source grounding, rather than tool invocation mechanics. Code is available https://github.com/IBM/VAKRA. Dataset is available https://huggingface.co/datasets/ibm-research/VAKRA