



India’s trade deal blitz: Why it's a strategic necessity despite uncertain gains
Subscribe to enjoy similar stories. Economics 101 tells us that free trade makes the world better off. Countries specialise in what they produce most efficiently and trade for the rest.
In theory, everyone gains. In practice, however, trade creates winners and losers within each economy, turning trade policy into politics. As a result, rather than embracing across-the-board liberalization, nations increasingly rely on bilateral and regional trade agreements, often shielding sensitive domestic sectors.
The shift has intensified during the Trump years, with tariffs used as tools of geopolitical leverage and countries scrambling to secure preferential access. India too has signed a flurry of agreements, including those with the EU and the US. While FTAs today are increasingly driven by geopolitical and supply-chain considerations, past experience shows they deliver results only when backed by competitiveness, infrastructure and domestic reforms.
The ratio of global goods trade to GDP, which peaked at 51% before the global financial crisis, has remained broadly stable over the past decade, fluctuating between 41% and 48%. Even after shocks such as the covid pandemic and Russia’s invasion of Ukraine, trade flows did not collapse. Firms rerouted supply chains, diversified sourcing and found new markets, keeping global commerce resilient despite geopolitical tensions.
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