India’s Trade Potion

“In today’s global economy, it

is not the big that eat the small;

it is the fast that eat the slow.”

— Ravi Venkatesan

As the sun dipped into the Arabian Sea on December 18, casting long shadows across Muscat’s glass-and-stone skyline, India and Oman signed a trade deal that seemed almost unassuming, at least on first read. There were no rousing statements about a new world order, no triumphant declarations, no chest thumping and no claims of economic conquests. Yet, in a quiet moment, India made a subtle but significant shift in how it intends to engage with a world that refuses to trade by old certainties.

The Comprehensive Economic Partnership Agreement (CEPA) inked in Muscat is not being positioned as a revolution. For it did something even more consequential. It acknowledged, with restraint and realism, that the global trading system which once powered India’s and similar emerging economies is no longer intact. Markets are fragmenting, supply chains have been politicised and economic policy has become an extension of strategic rivalry. In this unsettled landscape, trade is no longer merely about efficiency or scale. It is about resilience, credibility and choice.

For India, the moment carries a heavy weight. For three decades, its economic growth unfolded alongside an expanding global marketplace, promising access, predictability and multilateral rules. But that promise has frayed. Tariffs have returned, and quite abruptly. Rules are being selectively invoked. Exporters, from textile hubs in Tamil Nadu to pharmaceutical plants in Telangana, are being forced to operate in a world where access can no longer be assumed or taken for granted.

Trade Has Been Recast

Against this backdrop, India’s recent trade engagements, beginning with the Muscat agreement and extending across the Gulf and into Europe, signal neither retreat nor bravado. They represent a quiet recalibration; a recognition that the age of frictionless globalisation is over. In this new era, economic engagement must be designed with care, redundancy and strategic intent. For much of the post-1991 period, trade debates revolved around tariffs, deficits and volumes. The implicit assumption was that openness would deliver competitiveness, given time. That logic held in parts, but it masked fragilities such as shallow manufacturing depth, regional disparities and exposure to external shocks.

The new trade deals reflect a more layered conception of commerce, integrating goods with services, investment with standards, and tariffs with the movement of people. The India-Oman CEPA is a classic illustration of such as evolution. While tariff elimination on textiles, machinery, pharmaceuticals, and gems & jewellery offers immediate gains, the agreement’s deeper significance lies in its provisions on services and professional mobility.

By expanding access for Indian professionals in healthcare, education, engineering and finance, the agreement aligns trade policy with evolving comparative advantages. As economist Arvind Panagariya said: “India’s global edge increasingly rests not only in what it produces, but in what its people know and can do.” Trade, against this backdrop, becomes an extension of human capital strategy.

The exclusions are telling too. Sensitive sectors such as dairy, agriculture and consumer goods remain protected. Where critics see hesitation, policymakers envision sequencing. In a country where millions depend on small-scale production and informal livelihoods, sudden exposure to global competition carries social and political costs. India’s approach is an attempt to integrate without overwhelming, to open markets while retaining shock absorbers.

Logic of the Gulf Deal

India’s deepening engagement with Gulf nations is often viewed through the narrow prism of energy security. Yet, it understates a clinical transformation. Gulf economies are diversifying rapidly, investing in logistics, healthcare, tourism, digital infrastructure and education; all sectors where Indian firms and professionals are increasingly adept and competitive. The India-Oman relationship exemplifies this logic. Nearly 7 lakh Indians live and work in Oman, and India’s enterprises operate across construction, transport, IT services and healthcare. Remittances support families across Kerala, Tamil Nadu, Uttar Pradesh and more. These ties predate any existing formal trade agreements.

By codifying them through a comprehensive pact, India is converting lived economic interdependence into institutional certainty. Ajay Srivastava of the Global Trade Research Initiative has described such agreements as instruments of “risk management rather than export miracles” — tools that reduce uncertainty for firms and workers navigating increasingly volatile cross-border environments.

There is a strategic vision too. Oman’s position near the Strait of Hormuz places it at the crossroads of global energy and shipping routes. Deeper economic interdependence with such partners bolsters India’s geopolitical posture without overt alignment or confrontation. Trade, today, has become quiet diplomacy. It is building trust, embedding presence and creating shared stakes in stability.

Diversification as Strategy

Running through India’s recent trade initiatives is a consistent thread: diversification. The disruptions of recent years — the pandemic, supply-chain breakdowns, sudden tariff hikes — have exposed the risks of over-concentration. Access to a single market offers no comfort if it can be curtailed overnight by policy shifts. By cultivating a network of partnerships across regions, such as the Gulf, Europe and South-East Asia, India is spreading exposure and cutting vulnerability. Individually, these markets may appear modest. Collectively, they form a buffer against volatility. They allow Indian firms to hedge risk, explore niche opportunities and reposition supply chains.

The strategy also reflects realism about the limits of multilateralism. With global trade negotiations stalled and dispute-resolution mechanisms weakened, bilateral and plurilateral agreements have become the primary vehicles for advancing trade interests. India’s selective engagement suggests an emphasis on depth over breadth, on agreements that can be implemented and used, not merely announced.

Domestic Imperative

No trade deal, no matter how judiciously crafted, can succeed in the absence of domestic readiness. Infrastructure gaps, logistical inefficiencies, regulatory complexity and skills mismatches continue to constrain India’s export competitiveness. Small and medium enterprises, accounting for a significant share of exports, need targeted support. These range from trade finance and market intelligence to standards compliance and logistics facilitation. Without SMEs, the benefits of trade agreements may accrue disproportionately to larger firms.

States will be central to this effort. Industrial clusters across Gujarat, Tamil Nadu, Maharashtra, Uttar Pradesh and others stand to gain, but only if policy aligns with central funding in infrastructure, skilling and industrial ecosystems. Trade must connect ports to production floors and global demand to local employment. Public trust is equally important. Trade deals often face scepticism because benefits are diffused, while adjustment costs are concentrated. Transparent communication about objectives, safeguards and support mechanisms can help lend legitimacy and build durability.

Deliberate Horizon

As the light faded in Muscat that December evening, the agreement that was signed did not promise triumph. It promised something rarer: stability. In a world that trades in uncertainty, India is choosing deliberation over drama, resilience over reach and strategy over spectacle. This is not trade driven by nostalgia for a vanished global order, nor by the illusion of economic self-sufficiency. It is trade shaped by memory – of shocks endured, dependencies exposed and assumptions overturned. It accepts that openness in the new world requires design, and that integration needs to be earned and nurtured.

For India, the task ahead is clear but demanding. To implement with rigour, strengthen domestic capacities and ensure that trade serves development rather than dislocation. For the world, India’s approach offers a reminder that globalisation need not be abandoned to be reimagined. Sure, there were no fireworks in the skies over Muscat. But there was resolve. In an age of economic turbulence, quiet resolve may just prove to be the most enduring form of power.

He can be reached on narayanrajeev2006@gmail.com. Views expressed are personal. The writer is a veteran journalist and communications specialist