If there was any expectation that India would lose its economic nerve amid the uncertainty emanating from Washington, Narendra Modi’s third term has quietly but firmly laid it to rest. The return of Donald Trump to the White House, with his familiar unpredictability and veiled threats of punitive tariffs—sometimes as high as 50 per cent—has not derailed India’s trade trajectory. Instead, Modi 3.0 appears determined to de-risk India’s economic future by widening its trade map rather than pleading for favours from any single capital. The most recent and telling example is India’s confirmation of a long-awaited trade agreement with New Zealand following talks between Prime Minister Modi and his New Zealand counterpart, Christopher Luxon. Beyond symbolism, the numbers matter: New Zealand has committed investments of USD 20 billion over the next 15 years, a significant vote of confidence in India’s long-term growth story. Once formally signed in early 2026, the partnership will deepen India’s footprint in the Indo-Pacific, a region that will shape global trade flows for decades. This agreement is not an outlier. 2025 has emerged as one of India’s most active years in trade diplomacy, reflecting a deliberate strategy to diversify markets, secure investments and reduce overdependence on a few trading partners—most notably the US and China. A major milestone came with the India–EFTA Trade and Economic Partnership Agreement, which took effect on October 1, 2025. Covering Switzerland, Norway, Iceland and Liechtenstein, the pact reduces tariffs across a wide range of goods while unlocking long-term investment commitments into India. For Indian exporters, particularly in pharmaceuticals, engineering goods and specialised manufacturing, EFTA offers access to high-income markets with predictable regulatory regimes. For India, the agreement strengthens its image as a reliable destination for capital at a time when global investors are wary of geopolitical shocks.
In the Gulf, India signed a Comprehensive Economic Partnership Agreement (CEPA) with Oman in December 2025. The headline figure is striking: nearly 98 per cent of Indian exports will now enter Oman duty-free. Textiles, gems and jewellery, engineering goods and food processing stand to gain immediately, while Oman gains preferential access to the vast Indian market. This is not just trade expansion; it is strategic consolidation in a region that is central to India’s energy security and diaspora interests. Europe has also featured prominently. In July 2025, India and the United Kingdom finalised the Comprehensive Economic and Trade Agreement (CETA), granting Indian exporters near duty-free access to the UK market. At a time when Britain is recalibrating its post-Brexit economic identity, India has positioned itself as a partner of choice rather than a supplicant. Latin America and Central Asia, long peripheral to India’s trade strategy, are finally receiving attention. On April 1, 2025, India and Chile launched negotiations for a CEPA, with Chile inviting Indian firms to bid for lithium mining blocks—a critical input for electric vehicles and energy storage. Simultaneously, India has deepened engagement with Kyrgyzstan, expanding cooperation in pharmaceuticals, textiles, IT, agriculture and mining, while working to ease logistics and market-access barriers. Yet, admiration must be tempered with realism. Signing agreements is the easier part. Translating them into higher exports, sustained investments and quality jobs will test India’s domestic competitiveness. Indian manufacturing still struggles with logistics costs hovering around 13–14 per cent of GDP, compared to 8–9 per cent in export-driven economies. Regulatory complexity, MSME credit access and skill mismatches remain structural constraints. Modi 3.0’s trade diplomacy deserves credit for refusing to be rattled by external pressure and for methodically expanding India’s economic options. But the real verdict will depend on execution at home. Trade agreements can open doors; only domestic reform can ensure India walks through them.
