Trade deals brighten a year of navigating diplomatic doldrums
Indian diplomacy in 2025 unfolded in a world short on certainty. Trade rules were rewritten on the fly, alliances were tested, and neighbourhood pressures refused to ease. Yet, as the year closed, New Delhi could point to a set of concrete diplomatic outcomes that suggested direction, not drift. The year’s first signal came from London. The Comprehensive Economic and Trade Agreement with the UK, signed during Prime Minister Narendra Modi’s visit, is India’s most ambitious trade pact with a developed economy in years. By granting duty-free access to 99 percent of Indian exports by value, the agreement improves prospects for labour-intensive sectors such as textiles, leather, marine products and jewellery, while opening fresh opportunities for engineering goods, chemicals and auto components. What makes the pact stand out is its services architecture, a sector in which India’s exports to the UK is nearing $20 billion. The agreement enhances Indian professionals’ mobility beyond IT to sectors such as finance, education, architecture and engineering—a first for the UK at this scale. It signals a shift from transactional trade to longer-term economic integration.
If the UK pact marked determination at the end of years-long parleys, speed defined the India-New Zealand free trade agreement. Launched in March and concluded by December, it ranks among India’s fastest trade negotiations. Beyond tariff reductions, it positions India as a supplier of skilled talent and services, while offering a wider strategic entry into Oceania and the Pacific. In West Asia, the India-Oman Comprehensive Economic Partnership Agreement added depth to a trusted relationship. With 99 percent of Indian exports set to enjoy duty-free access and Oman allowing 100 percent investment in services, the pact strengthens cooperation beyond energy to education and healthcare, which could be crucial for India’s next phase of growth in services exports.
Closer home, India reinforced its standing as the first responder in Sri Lanka by continuing to offer help in cash and kind after the devastation wreaked by cyclone Ditwah. These gains came amid regional temperatures rising in Dhaka, Kathmandu and Islamabad, and global disruptions caused by Donald Trump’s second coming. New Delhi responded with tenacity, absorbing shocks, diversifying markets and mending relationships. In a fractured world, India ended the year with more options—and that can be counted as a net diplomatic gain.