The year of FTAs

INDIA HAS DIVERSIFIED EXPORT DESTINATIONS, BUT SHOULD ALIGN WITH GLOBAL STANDARDS TOO

- BISWAJIT DHAR

AS FREE TRADE agreements (FTAs) with Oman and New Zealand were concluded in the last fortnight of 2025, India rang out a year which was by far the most engaging for the country's trade negotiators.

Besides the two recently concluded FTAs, the agreement with the UK was inked during the year, while the FTA with the European Free Trade Association (EFTA) entered the implementation phase. The year saw India engaged in intense negotiations with its two largest partners, the US and the EU. Although expectations ran high that these FTAs would be concluded in 2025, several contentious issues, especially opening India's agricultural market, caused a logjam in the negotiations. Yet another significant decision was the one taken at the end of President Vladimir Putin's visit to New Delhi that India and the Eurasian Economic Union would engage in FTA negotiations covering sectors of mutual interest.

The importance of bilateral FTAs has considerably increased after President Donald Trump's second coming on two counts. First, global trade rules overseen by the World Trade Organization are in serious jeopardy after Trump decided to script his own trade rules. Back in the late 1940s, the global community recognised that businesses thrive when predictable rules are in place and they therefore crafted the rules-based trading system. With the multilateral system in disarray, bilateral trade agreements have emerged as the sole option for setting trade rules. Countries are hence engaged in crafting trade rules with their chosen partners to support global trade. India too is walking down this path to promote its interests.