India’s FTA Spree: How Post-COVID Geopolitics Is Reshaping Global Trade
- MGMMTeam
- 2 hours ago
- 4 min read
The COVID-19 pandemic did more than disrupt economies; it fundamentally altered global geopolitics and trade priorities. Supply-chain breakdowns, rising protectionism, and growing strategic rivalries forced nations to rethink economic dependencies. For India, this moment became an opportunity. After years of cautious engagement with free trade agreements, New Delhi has adopted a far more assertive trade diplomacy, positioning FTAs as both economic tools and strategic instruments in a rapidly changing world.
India’s renewed push reflects a clear understanding that economic resilience and geopolitical influence are increasingly intertwined. By broadening trade partnerships beyond traditional markets, India aims to secure stable export destinations, attract investment, and embed itself more firmly in global value chains.
From Hesitation to Momentum in Trade Policy
For nearly a decade, India was often seen as hesitant on large trade pacts, concerned about protecting domestic industries, especially agriculture and small manufacturing. However, post-COVID realities — combined with tariff pressures in major markets and slowing global growth — prompted a recalibration. The focus shifted toward carefully negotiated FTAs that balance market access with domestic safeguards.
This shift is evident in the speed and scale of agreements concluded in recent years. Rather than pursuing one-size-fits-all trade deals, India has opted for targeted partnerships with economies that align with its strategic, economic, and geopolitical interests.
Strengthening Ties with the Gulf: The India–Oman CEPA
One of the most recent milestones in India’s trade diplomacy is the Comprehensive Economic Partnership Agreement with Oman. The pact significantly liberalises trade between the two countries, granting near-complete duty-free access for Indian exports while opening Indian markets selectively to Omani goods.
Beyond trade volumes, the agreement deepens India’s engagement with the Gulf, a region vital for energy security, remittances, and diaspora ties. The inclusion of services, investment cooperation, and traditional Indian medicine reflects India’s broader objective of exporting not just goods, but also expertise and cultural industries. At the same time, sensitive sectors such as dairy and precious metals have been excluded, underlining India’s calibrated approach to liberalisation.
A Landmark Deal with the United Kingdom
India’s Free Trade Agreement with the United Kingdom marks one of its most significant economic partnerships with a Western economy in decades. The agreement enhances market access for Indian labour-intensive sectors such as textiles, leather, and engineering goods, while offering British exporters phased entry into the Indian market.
More importantly, the deal addresses services, professional mobility, and investment flows — areas where India holds a competitive advantage. In a post-Brexit context, the FTA also signals a re-alignment of economic relationships, strengthening India’s role as a key partner for advanced economies seeking diversification beyond China.
Deepening Europe Engagement Through the EFTA Pact
India’s agreement with the European Free Trade Association represents a different but equally strategic dimension of its trade policy. While EFTA countries are smaller markets, the pact is notable for its strong emphasis on long-term investment commitments, technology transfer, and job creation in India.
This agreement reinforces India’s message that FTAs are not merely about reducing tariffs, but about attracting capital, fostering innovation, and supporting domestic manufacturing under initiatives like “Make in India.”
Building on Existing Success with the UAE and Australia
Earlier agreements with the United Arab Emirates and Australia laid the groundwork for India’s current FTA momentum. The UAE pact strengthened India’s economic presence in the Middle East, while the Australia agreement expanded access to the Indo-Pacific region. Together, these deals diversified India’s trade geography and reduced over-reliance on any single market.
These partnerships also reflect India’s broader Indo-Pacific strategy, aligning economic integration with strategic cooperation in a region of growing global importance.
Negotiations That Signal Future Ambitions
India’s trade diplomacy extends beyond signed agreements. Negotiations with the European Union, New Zealand, and other partners indicate that the FTA push is far from complete. Talks with the EU, in particular, carry significant geopolitical weight, as both sides seek to balance economic cooperation with regulatory and sustainability concerns.
Parallel discussions with the United States and Latin American countries further highlight India’s ambition to emerge as a central node in global trade networks rather than a peripheral participant.
Balancing Global Integration with Domestic Protection
Despite its outward push, India continues to tread cautiously. Each agreement reflects an effort to protect vulnerable domestic sectors while opening opportunities for competitive industries. Exclusions, phased tariff reductions, and safeguard clauses are recurring features, demonstrating that India’s trade liberalisation is strategic rather than ideological.
This balance is crucial in maintaining domestic political consensus while pursuing deeper global integration.
The MGMM Outlook
India’s accelerated free trade agreement push reflects a clear recognition that the post-COVID global order rewards resilience, diversification, and strategic alignment. Disrupted supply chains and shifting geopolitical equations have pushed New Delhi to move beyond years of trade caution and actively shape its economic partnerships. Recent agreements with the Gulf, the UK, EFTA, Australia, and the UAE show a deliberate effort to secure export markets, attract long-term investment, and integrate India more deeply into global value chains, while also leveraging its strengths in services, skilled labour, and emerging sectors. These deals underline that trade is no longer viewed purely through an economic lens, but as a pillar of foreign policy and global influence.
At the same time, the approach remains measured rather than ideologically open. Each agreement is carefully structured to protect sensitive domestic sectors through exclusions, phased liberalisation, and safeguards, ensuring internal stability while expanding external opportunities. Ongoing negotiations with the EU, New Zealand, and other partners signal that this momentum will continue, positioning India as a proactive and adaptable participant in global trade networks. In an increasingly fragmented world, this strategy strengthens India’s standing as a reliable partner that balances global integration with national priorities.
(Sources: Firstpost, Economic Times, Moneycontrol)