Commercial
How Recent Trade Agreements Are Driving Growth Across Key Business Sectors in India
May 11, 2026
Introduction – Why Trade Agreements Matter for India’s Business Landscape
India’s new trade architecture is a result of its historic shift in its global economic strategy. As it moved away from its traditionally cautious approach, India has aggressively pursued a new generation of Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs). These pacts are no longer mere diplomatic milestones; they are active engines of sectoral growth that help reshape market access, attract record-breaking Foreign Direct Investment (FDI), and alter the landscape of corporate real estate and sectoral expansion.
Overview of India’s Recent Trade Agreements
The period between 2022 and 2026 can be called the golden era in the realm of Indian trade diplomacy, as recent trade agreements signed during this period emphasised advanced digital trade, services and investments worth billions of dollars.
Major Trade Agreements Concluded or Advanced
India has not merely increased its share in global trade but also diversified its trading partnerships. According to UNCTAD’s Trade and Development Report 2025, India ranks one of the major growing economies in terms of the diversity index of trade partnerships. Here are key agreements that have helped India reinforce its growth trajectory towards a stronger global trade presence:
India-EU Free Trade Agreement (2026): Hailed as the ‘Mother of All Deals’, it marks a significant milestone in one of India’s most strategic economic partnerships. The agreement addresses global economic challenges with preferential access across 97% of EU tariff lines, while preserving policy flexibility for sensitive sectors. The India–EU trade agreement is expected to eliminate 70.4% of tariff lines, accounting for 90.7% of EU tariff lines.
India-UK Trade Agreement: India-UK Comprehensive Economic and Trade Agreement (CETA) was finalised in May 2025 as a landmark deal eliminating tariffs on 99% of Indian exports to the UK. The India trade agreements 2025 cover 26 sectors. The India-UK trade deal business impact will be significant on leather, marine products, gems, textiles and toys.
India-EFTA Agreement: India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) was signed in 2024 and was effective from October 2025. It incorporated India’s commitment towards investment flows and job creation and aimed to attract $50 million FDI within a period of 10 years, with an additional $50 billion in the following five years. While the agreement aimed to strengthen cooperation in services, it offered market access covering 92.2% of tariff lines.
India-Oman CEPA: In December 2025, India signed CEPA with Oman as a step toward strengthening economic engagement with the Gulf region. The agreement granted zero-duty access on 98.8% of Oman’s tariff lines, which accounted for 99.38% of India’s exports by value. The agreement gave global recognition for traditional medicine and AYUSH, making this the first time a country extended traditional medicines to all modes of supply.
Renewed India-GCCs Negotiations: India and the Gulf Cooperation Council signed FTA negotiations in February 2026, formally launching negotiations for a comprehensive and mutually beneficial agreement. The GCCs are India’s largest trading partner amounting for 15.42% of India’s global trade. Key sectors of import include petrochemicals, precious metals like gold, crude oil, LNG, and key sectors of exports from India are rice, textiles, gems and jewelry.
What These Agreements Typically Offer
These agreements have carefully calibrated liberalisation to support and propel initiatives such as Make in India. However, highly sensitive agricultural products like dairy, meat, poultry and cereals are being fully safeguarded. Beyond tariff reductions, these agreements include:
- Services Liberalisation: Eases the movement of professionals like nurses, accountants and IT experts through Mutual Recognition Agreements (MRAs).
- Investment Protection: Safeguards foreign capital and boosts investor confidence.
- Digital Trade: Standardises regulations for data flow and e-commerce, especially in the IT sector and Global Capability Centers (GCCs).
- Supply Chain Integration: Reduces red tape and allows Indian manufacturers to become integral parts of global value chains.
How Trade Agreements Translate into Business Expansion
International trade agreements play a vital role in shaping the business environment as they facilitate market access, reduce trade barriers and promote economic growth. While these agreements create opportunities for market expansion, they also introduce challenges such as regulatory compliance and competitive pressures.
To leverage their advantages, businesses need to recognise their importance and proactively engage with them. Businesses should focus on supply chain diversification and sustainable practices to remain competitive. Further, investment in technological capabilities will position the business with a competitive advantage in the global business environment.
Key Business Sectors Gaining Momentum
IT and Software Services: The IT sector is considered the vanguard of exports from India. The new trade treaties with the UK and EU focus precisely on Mode 1v (digital delivery) and Mode 4 (movement of natural persons). They enable Indian companies to send consultants all across Europe, offering the most advanced cloud computing and artificial intelligence services, resulting in the next level of ‘Digital India’.
Global Capability Centres (GCCs): Due to India’s clear regulation regarding intellectual property and personal data, foreign companies are not just outsourcing, but creating GCCs that will be responsible for R&D activities, big data analysis and global finance management. According to estimates, by the end of 2026, GCCss will account for almost half of Grade A office space demand in India.
Manufacturing Hubs and Regional Headquarters: The ‘Make in India’ initiative has gotten an unprecedented boost through India-EFTA and India-UAE agreements. The investment inflows of $100 billion by the EFTA countries will be used entirely for manufacturing purposes. Moreover, firms have decided to base their entire South Asian and Middle East operations within India.
Financial and Professional Services: The liberalisation of services has enabled chartered accountants, architects and consultants to provide professional services to the international community. Hence, there has been a great demand for executive offices in financial centers such as GIFT City and Mumbai.
Why Companies are Expanding Operations in India Now
- Depth of Talent Pool and Cost Effectiveness: India has an extensive English-speaking and tech-savvy talent pool, offering unmatched value for money.
- Leap in Infrastructure: The swift establishment of expressways, freight rail lines and modern airports means logistics are no longer a burden.
- Policy Certainty: Policies will be set in stone via trade deals, leaving little room for sudden swings while assuring investments.
Implications for Commercial Real Estate and Business Hubs
As a direct consequence of sectoral growth, the commercial real estate demand experiences profound effects.
- As Multinational Corporations (MNCs) and GCCss scale up their operations, the demand for Grade A campuses rises, including LEED certified spaces with enhanced security.
- In response, organisations increasingly turn to more flexible managed offices to scale up staff quickly in order to seize emerging trade opportunities.
- As primary business clusters near capacity, trade-led growth is fueling in secondary locations and tier-2 cities.
What This Means for Businesses Planning Expansion
Businesses planning to expand must adopt a strategic two-fold approach in the global trading environment. Firstly, the companies must identify the opportunities provided in trade policies within specific sectors in reducing tariffs or liberalizing services. Secondly, they should focus on building commercial infrastructure to help them scale up their business without being constrained by costly fixed lease arrangements in already congested locations.
Conclusion – A Structural Shift, Not a Short-Term Trend
As India continues to recalibrate its global trade strategy, its FTAs aim to focus on building economic resilience and strategic depth. Furthermore, the Indian trade landscape is expected to transform with upcoming trade negotiations with the EU, Canada and other countries. These FTAs should be complemented by strong domestic reforms, improved logistics, and export-readiness among small and medium enterprises.
FAQs
1. How do recent trade agreements impact business growth in India?
Recent trade agreements have lowered the cost of exports as tariffs are being removed. This facilitates the mobility of professional talent and a regime that promotes FDI.
2. Which sectors are benefiting the most from India’s new trade agreements?
IT sectors, digital services, GCCss, professional services and high-value manufacturing are key sectors benefiting from India’s new trade agreements.
3. Are Global Capability Centres (GCCs) expanding rapidly in India?
Global Capability Centres in India's growth is being driven by the regulatory harmonisation around intellectual property rights and data transfer norms.
4. How do trade agreements influence Foreign Direct Investments (FDI) in India?
The trade deals contain an ‘investment protection’ clause that makes investments safe in the future.
References
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2233417®=3&lang=1
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2232327®=3&lang=1
https://www.commercejournals.com/assets/archives/2023/vol5issue3/5040-1688377596755.pdf
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