In the online analysis India’s renewed focus on free-trade agreements, published by the International Institute for Strategic Studies (IISS), the analysis by Viraj Solanki (Research Fellow for South and Central Asian Defence, Strategy and Diplomacy, IISS) examines India’s shift towards trade agreements as a central geo-economic instrument.
The author situates India’s post-2021 trade push within a context of slowing export growth, rising protectionism in key markets, and India’s expanding economic weight. He notes that 2025 marked a decisive acceleration, with India signing agreements with partners such as the UK, Oman and New Zealand, while advancing negotiations with the United States, the European Union and others. This turn reflects a deliberate effort to diversify export markets, mitigate tariff pressures, and improve India’s position in global supply chains.
The analysis situates this strategy against India’s long-standing protectionist instincts. Despite economic liberalisation, India continues to shield sensitive sectors such as agriculture and dairy. Earlier agreements with East and Southeast Asia contributed to widening trade deficits, reinforcing domestic caution. India’s withdrawal from the RCEP negotiations in 2019 is presented as a structural inflection point, after which New Delhi prioritised bilateral and comprehensive agreements that offered greater control over market access and limited exposure to Chinese imports.
The author highlights that recent agreements differ in scope and intent from earlier FTAs. Post-2021 deals combine tariff liberalisation with provisions on services, investment, labour mobility and job creation. Agreements with the UAE, UK, EFTA and New Zealand include explicit trade and investment targets while preserving red lines in politically sensitive sectors. The analysis links this approach to India’s broader foreign policy, arguing that trade agreements now serve geopolitical objectives by deepening ties with Western economies, Gulf partners and Indo-Pacific states.
The analysis also situates trade negotiations alongside domestic economic reform. Delays in concluding agreements with the US and EU have reinforced the government’s focus on tax, labour and regulatory changes to improve competitiveness and attract investment. However, the author argues that trade agreements alone are insufficient to meet India’s ambition of becoming a developed country by 2047. Their effectiveness will depend on sustained structural reform and the capacity of Indian firms to adapt to increased competition and deeper global integration.