India has experienced a subtle but significant change in its trade strategy over the last year. After years
of hesitant flirtation with free trade agreements (FTAs), the country has signed and operationalised a
series of ambitious deals with the United Kingdom, the European Free Trade Association (EFTA), and
most recently, New Zealand. Individually, each agreement expands market access. Taken together, they
indicate something much more important: India is starting to look at trade policy not as a defensive
instrument but as a core element of its development strategy.
The India–UK Comprehensive Economic and Trade Agreement (CETA) signed in July 2025 provides for
near-complete elimination of tariffs for Indian exports, covering about 99 percent of tariff lines. It not
only opens avenues for Indian professionals in services sectors in goods but also eases mobility and
recognition barriers. The Trade and Economic Partnership Agreement (TEPA) with EFTA countries,
Switzerland, Norway, Iceland and Liechtenstein came into force in October 2025 shortly afterwards.
The key difference in this agreement is the strong investment component, which includes
commitments to facilitate almost USD 100 billion in investment in India over the next 15 years, in
addition to the potential to generate approximately one million jobs. Most recently, India inked a
comprehensive pact with New Zealand in April 2026, doing away with tariffs on almost all Indian
exports, with a particular focus on MSMEs, women-led enterprises and skilled workforce mobility.
This cluster of agreements represents a clear departure from India’s previous reticence to deep trade
integration. More importantly, it is a recognition that in a fast-changing global economy, the costs of
isolation outweigh the costs of engagement.
➢ From Market Access to Structural Transformation
What is new about this stage of trade policy is not just the scale of the agreements but also their
architecture. Unlike previous FTAs which were narrowly focused on tariff reductions, these agreements
seek to link trade to broader development objectives, linking market access with investment, services
and labour mobility.
This shift matters because India’s growth constraints today are structural more than they are purely
external. The challenge is not just to export more, but to export better – to move up value chains, to
strengthen manufacturing capabilities, and to align its workforce with global demand. In this context,
better access to markets such as the UK can open up opportunities for labour-intensive sectors like
textiles, leather and gems and jewellery where India has capacity and employment potential.
Meanwhile, the provisions for professional mobility enhance India’s comparative advantage in
services, creating new opportunities in sectors such as IT, finance and consulting.
The role of investment is no less important. The long-term investment commitments that come with
the EFTA pact could help India tackle one of its oldest bottlenecks: the gap between domestic ambition
and available capital. Well-managed such investments could underpin infrastructure, technological
upgrading and the development of globally competitive manufacturing ecosystems.
More fundamentally, these agreements also portend a slow shift in India’s approach to employment
itself. The new trade framework is not to think of its workforce as primarily job seekers in a limited
domestic economy but to create opportunities for firms, especially exporters, startups and MSMEs to
scale, grow and become job creators in a globally connected marketplace.
Larger markets, inflows of investment and ecosystem support increase the probability of Indian
enterprises growing from subsistence or small-scale units to employment-generating units. In that
sense, the focus is not just on getting people into jobs, but on creating the conditions under which
more jobs can be generated within the economy.
The broader story is a slow shift in India’s growth model. For decades, growth was powered mainly by
domestic consumption and services exports. This model has been resilient but has failed to generate
enough large-scale employment, especially in manufacturing. The new trade agreements suggest an
effort to rebalance this model, more reliance on exports, greater integration into global value chains
and a more robust manufacturing base.
The world has reached a critical moment which demands an immediate response. The world economy
now experiences a period of separation which leads to various shifts between different economic
systems. Organizations are restructuring their supply chains because nations actively seek to expand
their production network diversity. The situation creates a dual nature for India because it allows them
to gain advantages, yet they must solve various emerging problems. The country has a clear chance to
become a manufacturing hub but it faces strong competition from Vietnam, Mexico, and Indonesia.
Trade agreements function as economic tools in this environment. They also demonstrate India’s
intention to strengthen its connection with international markets.
➢ The Real Test: Turning Agreements into Outcomes
Organizations need to move past their agreement signing phase to progress toward their first stage of
operational success. The main obstacle appears when organizations need to convert their theoretical
frameworks into actual development results. The previous trade agreements that India entered into
show that market access does not lead to increased export activities.
The primary restriction which influences operations stems from competitive market situations. Foreign
companies encounter three major challenges when operating in India because they must pay higher
shipping expenses and navigate through complicated government rules and deal with insufficient
infrastructure which prevents them from succeeding in international markets. The domestic problems
which exist need resolution because free trade benefits will not reach their full potential. The new
agreements include MSMEs but these businesses struggle to achieve international market entry
because they lack sufficient size and advanced technology and proper understanding of foreign
markets.
Skill development operates as a vital element which needs attention. The workforce needs to achieve
proper global standards before mobility provisions will create new opportunities for them. The process
needs ongoing financial support for educational programs and vocational education and skill
development programs which match industry needs. The institutional framework will determine which
path the situation will follow. Trade agreement implementation needs government agencies to work
together while they should maintain ongoing discussions with business organizations to discover and
solve emerging problems.
The system needs to handle various adjustment requirements. The process of opening up the economy
leads to domestic industries facing more competition from foreign businesses which results in short
term market instability but produces permanent economic advantages. The transition requires specific
policy measures to create equal distribution of advantages which will result from integration.
The new trade strategy’s success will depend on how well India unites its home-based changes with
its international trade expansion goals. The full potential of these agreements requires organizations
to enhance their logistics operations while they must reduce administrative complexity and build
better export networks and develop particular strategic approaches for each industry. The current
trade policy evolution extends beyond simple changes because India now follows a different path for
developing its national growth strategy.
The world needs basic economic growth because nations must develop their domestic markets and
international trade connections to build sustainable global cooperation. The core of this transition
involves a basic yet powerful change because it moves from an economic system which absorbs
workers to an economic system which enables businesses to create multiple job opportunities through
their operations. The new trade engagement system will bring a crucial change to India when
organizations successfully implement it because it will help the country build an economy which
produces jobs and connects with global markets and maintains equilibrium in its economic growth.
But that outcome is not guaranteed.
The core employment methods which India uses have started to change because these treaties show
signs of developing new approaches. The workforce expansion has served as a main focus for policy
discussions because people need to create sufficient job opportunities for the growing number of new
workers who enter the job market annually. The trade agreements function through a distinct logical
system which exists separately from their underlying agreements. The business environment strength
receives its operational basis from three main elements which include market access expansion and
investment promotion and business development support for organizational growth.
India’s new trade strategy creates job opportunities but its main objective centers on helping people
establish their own businesses. Businesses that enter international markets will achieve success
through MSME participation in export networks which capital investments allow them to expand their
operations. The process of business expansion leads to natural development of new employment
positions which become more stable and multiply throughout the market.
– Isha V , SSS Researcher
