Best of BS Opinion: Trade deal amid global stress test India's next moves

Here are the best of Business Standard's opinion pieces for today

2026 has opened with sharper global uncertainty and clearer policy tests at home as markets, trade negotiations and geopolitics are intersecting in ways that matter directly for India’s growth outlook, external stability, and employment prospects. Tensions rose in January after US President Donald Trump’s remarks on Greenland unsettled global trade sentiment. Markets have responded with a clear risk-off shift, notes our first editorial. Gold rose 20 per cent and silver 59 per cent in four weeks, while US and Japanese bond yields moved higher and equities stayed range-bound. With fears that foreign holders could sell US debt, India has also felt pressure through FPI outflows, a weaker rupee and modest equity corrections. 

 

On the other hand, the India-EU free trade agreement opens a meaningful window for labour-intensive exports such as textiles, footwear, leather and marine products, sectors dominated by MSMEs and large workforces, highlights our second editorial. High EU tariffs had limited competitiveness despite strong demand. Their removal could lift exports, utilisation and jobs. However, benefits will hinge on meeting EU standards on sustainability and traceability, requiring domestic investment in compliance systems, logistics upgrades and targeted skilling to convert tariff access into employment gains. 

On the same themes, Amita Batra notes that the India-EU agreement marks a shift towards deeper, high-ambition trade deals after talks that began in 2007. With export diversification urgent amid US uncertainty, swift signing and ratification matter. Yet market access alone is insufficient. India must close competitiveness gaps through tariff rationalisation, easier customs processes and regulatory reform. A review of the investment treaty framework and engagement with mega-regional blocs like the CPTPP could strengthen value-chain integration. 

As Kanika Datta observes, the FTA reflects changing geopolitics and strengthens India-EU ties through trade, mobility and security cooperation. While it expands export access, its employment impact will depend on smooth procedures and investment flows. Key sectors could benefit, but the absence of an investment protection agreement continues to deter capital. Addressing policy uncertainty and regulatory risk could reverse this, complementing the FTA and signalling long-term commitment to a stable investment environment. 

Finally, Dammu Ravi reviews Eswaran Sridharan’s Indian Politics & International Relations, a book that links India’s external behaviour to domestic political change. It traces how coalition politics, economic reforms and the rise of the BJP have shaped governance and foreign policy. Using subaltern realism, it situates India within global constraints, highlights the costs of regional conflict, and argues that India’s near-term future is that of a leading, not dominant, power shaped by domestic growth and stability. 

Stay tuned!