There is celebration in India around the trade deals with the EU and the US. These are significant steps and full credit to the people responsible. The finer details are a work in progress.
What do these agreements mean for Indian companies?
The world trade (see table) is about $24 trillion, accounting for 25 per cent of the world GDP. The top countries are in both lists — export and import. The top 10 countries account for 50 per cent of global imports and exports.
Access is the easy part, and access via tariffs is the new contained globalisation. We will see quick results in commodities both ways, but we will see slow progress in branded goods and services with real value. It will take a decade for us to gain from these trade agreements. Let’s see how:
India, the No 3 GDP country in the world, will gain by integrating with large trade countries. Our supply chains will become global; our consumer choices will also become global. We have no choice but to be a global trade partner of the top 10.
FDI and capital markets will gain with trade stability and news of access. Expect strong growth in market cap. But FDI must move up to 3-4 per cent of GDP to create good jobs.
Future exporters should learn global brand building from two-wheeler brands like Bajaj, Hero and TVS. Their playbook will help. Technology brands can learn from the IT services industry.
Indian brands will need to get competitive in the domestic market. It is not easy to beat Indian brands in India, and hence companies will need to over-invest — not in advertising but in understanding consumer shifts by region. Indian brands have nothing to worry about — very few multinational brands have succeeded in the Indian market in the areas of concern like dairy and agriculture. The Indian farmer needs the right support for quality produce.
Several key performance indicators and rankings must improve, if we are to translate our newfound access into tangible success. There is a full ecosystem of measures we need to work on. Our soft power rank is 30th — this must go up. Economic diplomacy must go hand in hand with political diplomacy. The Prime Minister, Chief Ministers and Ministers must take industry captains along for all bilateral and trade block meetings. The US, the UK and Finland have done this consistently. Our innovation ranking is 38 — we must get into the top 15. Our global competitiveness score is 41, way too low for a No 3 GDP nation. We need to protect IP — our rank in IP is 38. Our governance needs to improve dramatically. The government, bureaucracy and regulators must unite to ease processes, improve consistency and draw the line on deviation.
India must move away from the low-wage advantage moat. Wages will not remain low over a decade, and China is a good example. India cannot play the low wages card for long.
For Indian brands to be global successes, we need to improve design thinking, get better at understanding global consumers, and not remain content with serving the Indian diaspora. Not a single global brand has emerged from India from serving the Indian diaspora. We also need to hire multi-country managers and integrate them into our culture and ways of working. To attract them to India, we need to offer basics like quality global education. India has 200-plus IB (International Baccalaureate) world schools and Bengaluru has 40. The expats in Bengaluru fuelled this.
The strategy is right, but the execution will need top collaboration. The government and the private sector need to work in tandem; industry sectors should be willing to collaborate and avoid taking an industry silo view. This requires a fundamental shift in our CEO mindset of “I am okay as long as I gain”.
The government’s hard work and the skilful negotiation by diplomats have got us to the access door. Success is not guaranteed without a fundamental shift in our industry approach to tariff-led globalisation.
(Shiv Shivakumar is former Chairman of Pepsico India and former CEO of Emerging Markets at Nokia)
More Like This
Published on February 16, 2026
