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    India’s EU, US trade deals driven by pragmatism not ideology | Talking Sense with Srini
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    The Federal's Editor-in-Chief S Srinivasan terms the two trade deals a pragmatic choice rather than an ideological one.

    How India’s EU and US trade pacts compare with the 1991 liberalisation

    1991 reforms opened up industry, created a middle class and reduced poverty; India is being opened up once again, this time through trade, says S Srinivasan

    Vijay Srinivas
    10 Feb 2026 4:00 PM IST  (Updated:2026-02-10 10:30:23)
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    India’s newly announced trade agreements with the European Union and the United States could mark the country’s most far-reaching economic reform since the landmark liberalisation of 1991, according to The Federal’s Editor-in-Chief S Srinivasan.

    Speaking on The Federal's flagship YouTube programme Talking Sense With Srini, Srinivasan said the twin deals signal a decisive reopening of India’s economy, comparable in scale and impact to the reforms that dismantled licence controls, liberalised foreign exchange and transformed consumer choice three decades ago.

    1991 vs 2026 for Indian economy

    “The 1991 reforms were breathtaking in their sweep. They opened up industry, created a middle class and reduced poverty dramatically,” Srinivasan said. “What we are seeing now is India being opened up once again, this time through trade.”

    India has concluded a comprehensive free trade agreement with the EU, being described as the “Mother of all Deals”, and finalised a framework for an interim trade pact with the US, the world’s largest economy. Together, the agreements promise wider market access, deeper integration into global supply chains and increased competition at home.

    For consumers, Srinivasan said, the impact would be greater choice, from automobiles and motorcycles to wine and dairy products, albeit within quotas and safeguards. For the domestic industry, however, the challenge will be far more intense.

    “Indian manufacturing and agriculture will face real pressure,” he said. “Quality, competitiveness and exports have long been our weak points.”

    Pragmatism over ideology

    Srinivasan noted that, unlike 1991, when India was forced into reform by a balance-of-payments crisis, today’s push comes despite strong macroeconomic indicators such as high growth and low inflation. The trigger, he argued, lies in the stress within the external sector and job losses linked to elevated tariffs.
    “India historically reforms only when a crisis stares it in the face,” he said. “This time, the external trade environment and pressure from the US forced the market open.”

    He was particularly critical of the shift away from a multilateral, rules-based trade order, under the World Trade Organisation (WTO), towards bilateral power-driven negotiations led by US President Donald Trump. While Washington cut tariffs on Indian goods from a punitive 50 per cent to 18 per cent, Srinivasan cautioned that overall duties remain far higher than before.

    “India is not celebrating because tariffs fell,” he said. “It is relieved because, relative to competitors such as Vietnam and Bangladesh, it is now slightly better placed.”

    Where compromise is unlikely

    On agriculture, the most politically sensitive sector, Srinivasan said the government is unlikely to compromise on staples such as wheat, rice and milk. “If farmers’ interests are not protected, it becomes politically unsustainable,” he said.
    Ultimately, Srinivasan framed the deals as a pragmatic choice rather than an ideological one. “You can look at this through purity or pragmatism,” he said. “India chose pragmatism, and the consequences of that choice will define the next phase of growth.”
    India-EUtrade dealsUS-India tradeeconomic reformsDonald Trumpliberalisation
    Vijay Srinivas
    About the AuthorVijay Srinivas
    Vijay Srinivas is Senior Social Media Executive, The Federal.
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