"We do not do (trade) deals in a hurry and we do not do deals with deadlines or with a gun to our head."
When Commerce Minister Piyush Goyal said this at the Berlin Dialogue in Germany last year, it essentially summed up two things. First, India would chart its own course on the road to global trade, and second, it would not only navigate but stand firmly aligned with its foreign trade map.
That approach — cautious, calibrated, and focused on securing favourable terms — has shaped India’s trade strategy under Modi 2.0, as it seeks to expand global market access while retaining policy flexibility at home.
The Central government announced a series of significant trade agreements through 2025: deals that promised wider market access, lower tariffs, and new opportunities for exporters across sectors.
That promise now faces its first real test.
From the United Kingdom and Oman to New Zealand and Europe-linked blocs, New Delhi signed or concluded multiple agreements as recent as Monday (April 27, 2026) in what has been a trade-packed year, aiming to deepen its integration with global markets. On paper, these deals offer significant tariff reductions across key sectors, alongside provisions on services, mobility, and investment.
But in 2026, with conflict simmering in West Asia and global trade routes under strain, the focus has shifted from ambition to execution.
What matters now is not just what has been signed, but what has actually begun to work and what may be delayed.
The lag between promise and payoff
Trade agreements often come with a built-in delay before businesses can actually benefit, a point experts say is both expected and necessary.
“Typically, after signing, agreements need to be ratified by the respective legislatures. This process generally takes longer for a trade bloc than for a bilateral partner, which is why there is often a lag between announcement and effective market access,” Miren Lodha, Senior Director, Crisil Intelligence, told ET Online.
That lag is particularly visible in India’s agreements with larger partners. While the India–Oman Comprehensive Economic Partnership Agreement (CEPA) signed in December 2025 is expected to move relatively quickly, deals with the United Kingdom and the European Union involve more complex procedures, including parliamentary approvals and layered legal scrutiny.
Agneshwar Sen, Trade Policy Leader at EY India, says such delays are part of the process. “Such gaps are quite typical in international trade agreements, where it often takes one to three years between signing and entry into force. This is especially true for agreements involving multiple jurisdictions or deep regulatory commitments. India’s current pace is broadly in line with global practice, although it may appear slower due to the number of parallel negotiations and the increasing complexity of modern trade agreements.”
For India, that means most of its headline agreements remain in transition. The benefits exist in legal text, but not yet fully in trade flows.
Where early gains are likely
Even within this waiting period, some sectors are better positioned to benefit than others — typically those already exporting but facing tariff disadvantages.
“In the near term, the clearest beneficiaries are sectors that are already exporting but face a cost/tariff disadvantage versus competing suppliers in the destination market, largely because peers enjoy preferential import duties. These include readymade garments, leather and footwear, chemicals, and gems and jewellery,” Crisil’s Lodha said.
Government data backs this sectoral tilt. Under agreements such as the India–UK pact and the Oman CEPA, a large share of Indian exports — spanning textiles, marine products, engineering goods and jewellery — is set to move toward zero-duty access once operationalised, according to the Press Information Bureau.
The India–EFTA Trade and Economic Partnership Agreement (TEPA), between India and the European Free Trade Association (Switzerland, Norway, Iceland, Liechtenstein), already in force, adds another layer by linking tariff access with long-term investment commitments, with official projections pointing to significant capital inflows and job creation.
But readiness will determine how quickly these gains materialise.
Big exporters move first
The early phase of any trade agreement tends to favour firms already embedded in global markets.
Mitali Nikore, Founder and Chief Economist at Nikore Associates, describes this as a structural reality.
“The beneficiaries of the first wave will be those who already export — large firms and established mid-size exporters. The Micro, Small, and Medium Enterprise sector, which has the most to gain, is also the least prepared. Origin compliance documentation, standards certification, market knowledge — these are not problems that sign themselves away when a Free Trade Agreement ..
This uneven distribution is not unique to India, but it places pressure on domestic policy to ensure smaller firms are not left behind as agreements move from text to practice.
Oman first, Europe later
Not all agreements are expected to move at the same speed.
India’s deal with Oman is widely seen as the quickest to translate into tangible gains, given its narrower scope and bilateral structure.
“The agreement with Oman could also generate quicker benefits given its narrower scope and faster path to implementation,” Sen said.
Official data from the Press Information Bureau shows that the India–Oman CEPA offers zero-duty access on 98.08% of tariff lines, covering 99.38% of India’s export value, with concessions kicking in from the start once implemented.
By contrast, agreements with the United Kingdom and the European Union are more complex in both design and approval processes.
“By contrast, the agreements with the United Kingdom and the European Union are expected to deliver more substantial but mid to longer term gains due to their broader scope and more complex regulatory requirements,” Sen added.
Nikore points to the European Union’s layered ratification system, which includes legal revisions, translation across member states, and approvals from multiple institutions, making quick implementation difficult.
India–New Zealand’s 'once-in-a-generation' trade pact
India and New Zealand have signed a long-awaited free trade agreement (FTA), described by New Zealand Prime Minister Christopher Luxon as a “once-in-a-generation” deal aimed at unlocking trade in goods and services, boosting investment, and enhancing labour mobility.
Finalised after negotiations that began in 2010 and were revived in 2025, the pact is among India’s fastest-concluded FTAs and spans 20 chapters, covering areas from goods and services to dispute settlement and regulatory cooperation.
At its core, the agreement significantly lowers trade barriers. India has secured duty-free access for all its exports to New Zealand, including labour-intensive sectors such as textiles, leather, plastics, and engineering goods. Services—a key pillar of India’s trade strategy—see major gains, with commitments across IT, education, finance, tourism, and construction. A new visa pathway will allow up to 5,000 Indian professionals to work in New Zealand for three years, alongside expanded opportunities in healthcare, engineering, education, and niche segments like AYUSH.
The pact is also expected to catalyse investment, with projections of up to $20 billion in New Zealand foreign direct investment into India over 15 years. Bilateral trade, currently around $2.4 billion, is projected to reach $5 billion by 2030.
For New Zealand, over half of its exports to India gain immediate duty-free access, with tariffs on other goods to be reduced over time.
Despite broad liberalisation, India has ring-fenced sensitive sectors such as dairy and key agricultural products through quotas and safeguards, reflecting a calibrated approach that balances market access with domestic protections while strengthening India’s Indo-Pacific trade footprint.
West Asia conflict and trade risks
If timing is one challenge, geopolitics is another.
The escalation of tensions in West Asia has introduced new uncertainty into India’s trade outlook, particularly with Gulf partners that form a key trade and energy corridor.
“Ongoing instability in West Asia could disrupt shipping routes, increase freight and insurance costs, and create uncertainty in energy markets, all of which would affect India’s trade flows,” Sen said.
Data from the Commerce Ministry shows that trade with the Gulf Cooperation Council exceeded $178 billion in FY 2024–25, underlining the region’s central role in India’s external trade.
Nikore describes this as a structural stress on India’s trade architecture, affecting not just goods but also energy imports, remittances, and ongoing trade negotiations.
Dr. Amit Singh, Associate Professor at Jawaharlal Nehru University, points to specific vulnerabilities. “While India has sought to mitigate risks in crude oil supply by diversifying towards Russian imports, its options remain more constrained in the case of liquefied petroleum gas (LPG) and liquefied natural gas (LNG).”
Even agreements that are otherwise on track, such as the one with Oman, operate within this broader regional context.
The US framework: speed with uncertainty
Alongside formal trade agreements, India’s interim framework with the United States offers a different model — faster to implement, but far less predictable.
“India’s framework deal with the United States is likely to see immediate changes in the terms of our bilateral trade given that it is likely to be implemented at the earliest possible,” Sen said.
Lodha adds that this framework has already reduced India’s relative disadvantage compared to competing exporters in East Asia, particularly in sectors such as textiles, fisheries, processed foods and gems and jewellery.
But even as the contours of the agreement sharpen, the fine print remains in flux.
On Monday, Commerce and Industry Minister Piyush Goyal said India and the United States have “almost finalised” the first tranche of the proposed bilateral trade agreement (BTA), with ..
“We are trying to cross the t’s and dot the i’s on that (BTA) and work out what would be the mechanism by which India can get preferential market access in the US market compared to our competitors,” Goyal said, adding that an Indian negotiating team is currently in Washington for three days of in-person talks — the first since October.
The negotiations follow a recent 40-minute phone call between Prime Minister Narendra Modi and US President Donald Trump, underlining the political push behind the deal.
The urgency stems from shifting ground in Washington.
When India and the US first announced their interim framework in February, New Delhi stood to gain from a relative tariff advantage after the US reduced proposed reciprocal duties on Indian goods to 18% from 25% and rolled back a penal tariff linked to Russian o ..
When India and the US first announced their interim framework in February, New Delhi stood to gain from a relative tariff advantage after the US reduced proposed reciprocal duties on Indian goods to 18% from 25% and rolled back a penal tariff linked to Russian oil purchases.
However, the landscape changed rapidly. Following a ruling by the Supreme Court of the United States striking down certain tariff measures, Washington imposed a temporary 10% blanket tariff on all countries under Section 122 of the Trade Act of 1974 for 150 days.
That shift has effectively levelled the playing field — and, in doing so, diluted India’s earlier comparative advantage.
Officials now say the bilateral pact will need recalibration to restore preferential access for Indian exporters.
Commerce Secretary Rajesh Agrawal had earlier indicated that both sides are still working through key structural issues.
We are looking at finalising the legal agreement, which is a logical follow-up of the joint statement released on 7th February. There is a need for further discussions and follow-up engagement to take this forward… India and the U.S. will work together to finalise timelines and next steps as part of the ongoing engagement,” Agrawal said.
Yet, unresolved tensions persist. The United States has initiated investigations under Section 301 of the Trade Act involving several countries, including India — a move New Delhi has pushed back against.
India has also defended its $42-billion trade surplus with the US in 2025, arguing in its submission to the US Trade Representative that such imbalances are a “macroeconomic phenomenon” shaped by multiple global factors, and not the result of any single country’s policies.
With merchandise exports to the US touching $87.31 billion in FY26 and imports rising to $52.9 billion, the stakes are high.
A calibrated strategy under pressure
Taken together, India’s recent trade agreements point to a more deliberate strategy.
“India’s current trade negotiation strategy reflects a more targeted but calibrated approach compared to earlier periods, with a stronger emphasis on safeguarding domestic interests while pursuing external market access,” Sen said.
Dr. Singh identifies a clear pattern in partner selection. “India has prioritised agreements with partners where it holds strong offensive export interests—such as gems and jewellery in Oman, textiles in the UK, and pharmaceuticals in EFTA—while carefully excluding sensitive sectors like dairy.”
This approach reflects a shift from broad multilateral engagement to targeted bilateral partnerships, particularly with advanced economies where India sees clear export potential.
At the same time, more complex negotiations with partners such as the European Union and the United States continue at a slower pace, shaped by regulatory demands and political considerations.
From agreements to outcomes
As India moves through 2026, its trade story sits between promise and preparedness.
Exports have been rising, with government data showing growth of over 15% between November 2024 and November 2025, alongside a narrowing trade deficit. But the real test lies ahead.
“The delay between the signing and operationalisation of trade agreements is neither unusual nor indicative of policy failure; rather, it reflects standard global trade practices,” Dr. Singh said.
The agreements are in place. The pathways are defined. But their success will depend on how quickly they translate into actual market access — and how well they hold up in a world where supply chains are strained and geopolitics remains uncertain.
For now, the shift is visible. The outcomes are still taking shape.
Source Name : Economic Times