Historic Trade Deals Put India on Global Stage but Challenges Remain

Published: 18 February 2026. The English Chronicle Desk. The English Chronicle Online

India has rapidly emerged as a central player in global trade diplomacy in recent months, signing a series of landmark agreements with major economic powers that signal its growing economic confidence. However, while these historic trade deals have lifted the country’s international profile, experts warn that significant structural, logistical, and competitive challenges still stand in the way of turning diplomatic success into sustained export growth and economic advantage.

In a remarkable diplomatic push, New Delhi has concluded major agreements with both the European Union (EU) and the United States (US) – moves described by officials and analysts as emblematic of India’s pivot from longstanding protectionism towards a more proactive global trade strategy. The pact with the EU, agreed in late January this year, was hailed as a historic Free Trade Agreement after nearly two decades of negotiation and is expected to significantly ease tariffs and broaden market access once ratified.

Meanwhile, India’s interim agreement with the US has already led to a considerable cut in tariffs – with American duties on Indian exports lowered to 18% – and set the stage for deeper trade cooperation. That deal comes amid broader political and economic negotiations, including indirect shifts in energy sourcing strategies.

Together, these recent trade milestones mark India’s 10th free trade agreement (FTA) since 2014, underscoring a clear shift in the country’s trade policy stance after decades of slow negotiations and limited market opening. These developments have also helped deepen India’s economic ties with other partners, including plans to start negotiations with the Gulf Cooperation Council (GCC) bloc, which accounts for roughly 15% of global trade flows.

Yet, while the diplomatic achievements are significant, experts caution that realising tangible export growth and competitive advantage will require more than the ink on agreements. Historically, India has struggled to fully capitalize on FTAs: its rate of utilisation of preferential tariff benefits has hovered around only about 25%, compared with 70–80% in advanced economies. This gap reflects persistent issues such as cumbersome paperwork, high compliance costs, inconsistent customs procedures, and complex “Rules of Origin” requirements that hold back many exporters, especially smaller firms.

Structural challenges also extend beyond documentation. Exporters face non‑tariff barriers, lengthy logistics times, infrastructure bottlenecks, and higher transaction costs that blunt the competitive edge FTAs are supposed to confer. Analysts note that other Asian economies like Vietnam and Bangladesh, which have prioritized export‑oriented manufacturing with streamlined supply‑chains and faster customs processes, have outpaced India in recent years.

Experts argue that unless New Delhi accelerates reforms to support export competitiveness – including improving logistics, simplifying compliance, and investing in supply‑chain efficiency – its FTAs risk being opportunities on paper but under‑utilized in practice. They also urge deeper reforms such as modernising investment treaty frameworks and joining broader regional trade partnerships to attract more foreign direct investment and integrate India more fully into global value chains.

Nevertheless, many in India’s business and diplomatic communities believe that the recent deals lay an important foundation. They view the trade agreements as structural benchmarks that can, with the right domestic follow‑through, help India reach its ambitious goal of $1 trillion in annual exports and further solidify its position on the global economic stage.

As India transitions from negotiating tables to implementation on the ground, the focus now shifts to how these agreements translate into jobs, investment, and sustainable economic growth for its diverse industries and trading partners.

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