Between 2021 and 2026 India’s geoeconomic policy has been pivoting towards free trade agreements as its central pillar, especially with partners that fall into the category of developed nations.

The broad goal and strategic logic guiding these pacts is the desire for preferential access to markets where Indian exports have not been able to reach their fullest potential owing to either heavy regulation or procedural red tape of some variety.

According to a press release by India’s Press Information Bureau, between 2021 and 2026 India has concluded trade pacts covering 38 countries which allows liberalised access to Indian goods and services in those markets.

The most consequential of these deals has been the Comprehensive Economic and Trade Agreement (CETA) with the UK which will come into force on July 15 2026, The Trade and Economic Partnership Agreement with the European Free Trade Association which came into force in October 2025, Comprehensive Economic Partnership Agreement with Oman and a Free Trade Agreement (FTA) with New Zealand in December 2025. And the two crown jewels are an FTA with the European Union (EU), dubbed “the mother of all trade deals” in January 2026 and another under negotiation but likely to be signed within 2026, the Bilateral Trade Agreement (BTA) with the US.

According to a press release by India’s Ministry of Commerce and Industry in March 2026, the government of India sees the FTAs and other trade agreements with these developed and prosperous economies as “unique and a recognition” “of the scale of our market, our economic potential and the trust in the capabilities of 1.4bn Indians”.

The need for the BTA with the US has been felt going as far back as 2006 in what was then the most active year of the then US-led Global War on Terror under President George W. Bush, which was forcing Washington to reconsider its relations with New Delhi.

While the Indian IT services industry had already been on the path of consolidating an edge it had started inculcating around the world as it offered what was perhaps the lowest prices for the highest quality of work anywhere, its real boom period only started when the US market became accessible to it after the diplomatic thaw with Washington between 2006-2008.

In 2026, Indian IT and financial services exports account for the largest source of inward remittances for the country and the largest employment source for its sizeable white-collared labour force.

The services trade and the ecosystem of employment creation has not only enabled market access for foreign firms but also uplifted other tertiary sectors inside India’s own economy as well, ranging from food retailers to laundry service providers, and healthcare which compete for the overall meagre but still worthwhile uplifted purchasing power of the Indian white collar working class.

However, the view from the white collar working class is slightly less rosy when compared to their peers in the US who may be working for the same entity but earning upwards of five to seven times the remuneration for the exact same work. Meanwhile, due to tariff policies and customs duties these workers pay between three to four times the global average for durable consumer goods such as smartphones, TVs, air conditioners and cars.

This double whammy of disparity is further compounded with the high income tax rates which from a white-collared working class perspective puts a disproportionate burden on them. Both the absolute upper layer of society in the form of high net-worth individuals enjoy policy support from the government in terms of benefits for their new ventures, and the bottom of the social pyramid who enjoy it in the form of subsidised pricing or even direct cash aid from the perspective of the tax paying white collar middle class - all mostly funded directly from its high stress mandatory income tax filing.

The deal with the US and EU therefore may alleviate this ballooning resentment of what is arguably the most squeezed class of the Indian economy. However, as is often the case, the solution for a decade-old problem has arrived when the entire chess board is about to change, as agentic Artificial Intelligence (AI) threatens to shrink the very opportunities for the outsourced IT and financial services that Indian companies have built their long-standing reputation and market shares on.

While India’s government is also equally addressing the export of goods and commodities in trade agreements, the aggregate share of what employment opportunities and wages the sectors that produce them in India can offer is a lot lower than a globalised services export economy could offer the Indian middle class.

As things stand, without a mass pivot to a manufacturing economy where Indian enterprises can overnight compete with the economies of scale consolidated by China over 40 years, India and its middle class fortunes look bleak. Especially so as India’s elite capital holding high net worth individuals and entities also prioritise investments in short term profitable ventures which don't often account for preserving a standard of living built over decades by the white collar workforce for itself.

While the Indian government makes an effort of cooperation with the so called Global South and groupings like BRICS, it has no economic incentive to abandon the economic lifeline its inward remittances have become over the past two decades as its services-trade with the West has skyrocketed.

That said, as it doesn’t produce enough hydrocarbons to self sustain its own domestic needs, and the US alone can neither price its hydrocarbons low enough nor supply volumes high enough for New Delhi’s needs to be satiated in the long term, India is also forced to import commodities and fuels from Western adversaries such as Russia, for which it is billed primarily in US dollars. This has created a vicious loop in which India is constantly performing a diplomatic balancing act under which aligning with one side or another is nearly impossible.