In the Journal article From RCEP to FTAs: Transformation of India’s Foreign Trade Policy in Modi’s Era, published in the International Politics (Published: 06 March 2026), Jinying Chen seeks to explain a puzzle in India’s recent foreign economic policy: why did India withdraw from the Regional Comprehensive Economic Partnership (RCEP) in 2019, yet subsequently join the Indo-Pacific Economic Framework (IPEF) and pursue free trade agreements with advanced economies such as Australia, the United Kingdom, and the European Union?
The article makes a theoretical intervention by arguing that existing explanations are incomplete. One strand of scholarship attributes India’s policy shift primarily to geopolitical factors, particularly changing relations among India, China, and the United States. Another focuses on economic calculations, including trade deficits and the expected costs and benefits of trade agreements. While acknowledging the importance of both factors, Chen argues that they do not adequately explain how India arrived at these decisions. In his view, foreign economic policy is “never a product of pure economic calculation, but an activity with complex political motivations and political logic.” The article therefore shifts attention to domestic politics and the interaction between social coalitions and the state.
Drawing on a state-society framework, Chen argues that foreign economic policy emerges from interactions between organised interest groups and state institutions. Business associations, industrial sectors, and farmers’ organisations seek to influence policy, while state actors respond to, manage, or accommodate these pressures. Policy outcomes are shaped by both the configuration of social coalitions and the preferences and autonomy of the state.
The first case study examines India’s withdrawal from RCEP. Chen shows that the Indian business community was divided over the agreement. While the Confederation of Indian Industry (CII) supported RCEP and viewed it as beneficial for exports and integration into global value chains, the Federation of Indian Chambers of Commerce and Industry (FICCI) remained sceptical. At the same time, protectionist interests in sectors such as automobiles and steel opposed the agreement, while farmers’ and dairy organisations mobilised against agricultural liberalisation. According to Chen, the alliance between protectionist business groups and agricultural interests generated substantial pressure on the government and contributed to India’s decision to withdraw from RCEP.
The second case study focuses on India’s participation in the IPEF and its new round of free trade agreement negotiations. Here, Chen identifies a different political configuration. Major business associations broadly supported negotiations with advanced economies, while the flexibility of the IPEF and bilateral trade negotiations reduced some of the concerns that had characterised the RCEP debate. Agricultural groups remained cautious, but Chen argues that the government was able to mitigate opposition through greater flexibility in bilateral negotiations and by protecting sensitive sectors.
The article also highlights changes within the state itself. Chen argues that foreign economic policymaking became increasingly centralised under Prime Minister Narendra Modi, with greater authority concentrated in the Prime Minister’s Office. At the same time, security institutions, and security concerns, particularly regarding China, played a growing role in economic policymaking. The government also introduced initiatives such as Atmanirbhar Bharat and the Production Linked Incentive (PLI) scheme, which helped reduce resistance from affected industries and created conditions for the new round of trade negotiations.
The broader implication of the article is that India’s recent trade policy shift cannot be understood through geopolitics or economic interests alone. Chen concludes that the movement from RCEP withdrawal to free trade agreement activism resulted from changing business and agricultural coalitions, a more centralised state structure, and the government’s efforts to accommodate or neutralise domestic opposition. India’s foreign economic policy transformation, therefore, emerged from the interaction between organised social interests, shifting state preferences, and evolving decision-making structures.
