Becoming a Global Trade Power through Regulatory Excellence: India's Mantra for 2026

Our view: 

As part of collaboration across the Atlantic, the EU-U.S. Joint Financial Regulatory Forum is a most significant entity. It allows for regular financial regulatory dialogue between the two sides. The Forum is co-chaired by the U.S. Department of the Treasury and the European Commission. As part of the India EU deal, New Delhi may soon need to host something similar, an India-EU regulatory forum where all financial regulators from the two sides meet. Already in January this year, the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, signed a Memorandum of Understanding (MoU) with the Reserve Bank of India (RBI) to facilitate cooperation and exchange of information for the recognition of central counterparties established in India and supervised by RBI. 

As a press note issued after the signing noted, this agreement marks a significant step towards restoring access for EU clearing members to Indian central counterparties and follows two years of sustained engagement between ESMA and RBI. It reflects ESMA’s strong commitment to international supervisory cooperation and mutual support to advance safe, resilient and open financial markets. Let unsaid was that this was made possible only because of the successful India-EU trade deal.  

Already ESMA is continuing discussions with the Securities and Exchange Board of India (SEBI) and the International Financial Services Centres Authority (IFSCA) to conclude similar cooperation arrangements.

In this context, a statement from the Government of India's Economic Survey 2025-26  stood out about Regulatory studies: "The Survey suggests that Schools of Regulatory Studies could be established either as new stand-alone institutions or as additions to existing institutions" - to train a new generation of specialists, balancing innovation with compliance. The Survey highlighted a pivotal shift in India's governance: the transition from merely having laws to mastering the art of regulation. 

These observations gain importance as converging Regulations garner high significance from both the recent Indo-EU and Indo-US trade deals.  

It is indeed a transformative phase for India's economic landscape as of February 2026. This period is defined by a dual-pronged strategy: deepening internal regulatory ease through the 2026-27 Union Budget and expanding global market footprints via historic trade agreements with the European Union and the United States.

These reforms signal that India is no longer just a consumption market but is positioning itself as a global manufacturing and services hub. Two very important things that need to be done for the agreements to succeed are:

• Regulatory Alignment: India must dismantle "burdensome" digital trade barriers and align its data protection laws with US and EU Big Tech standards.

• Standardization: In each of the agreements, the countries must quickly synchronize technical standards and ensure procedures for tech products are made similar.

The internal "regulatory clean-up" acts as the foundation, will make India a more valued partner for the massive trade commitments made by both the EU and the USA and India.

Background:  

In its Press Note titled “Ease of doing Business: India’s ongoing Regulatory transformation, the Union Budget FY 2026-27: Strengthening India’s Business climate” made the following important observations. 

• “Ease of Doing Business (EoDB) has emerged as a cornerstone of India’s economic reform agenda and is reaffirmed as a key pillar of growth and development.”

• Structural reforms supporting Ease of doing Business:

“Structural reforms supporting EoDB have focused on regulatory simplification, institutional consolidation, and technology-led governance across financial markets, taxation, labour, banking, and environmental regulation. Recent measures by sectoral regulators, coupled with reforms in insurance, securities, GST, labour codes, and public sector banking, aim to reduce compliance burden, enhance transparency, and improve access to finance. Together, these reforms strengthen regulatory certainty, promote competition, and support a more efficient and resilient business ecosystem.”  

• Regulatory clean-up:

• RBI has decluttered its rulebook from 9000+ scattered circulars to 238 "Master Directions." “The initiative enhances regulatory clarity, reduces compliance burden, and supports the objective of improving EoDB.”

• Insurance Sector: The Sabka Bima Sabki Raksha Act (2025) aims to make insurance cheaper and more available by inviting more players into the market, through initiatives like 100% Foreign Investment, lower Entry Barriers and less Paperwork.

• Public Sector Banks now use the Credit Assessment Model (CAM) for faster loan sanctions for MSMEs.

• Labour Law Overhaul: The government collapsed 29 complex laws into just 4 Labour Codes, leading to faster approvals of construction permits, flexibility with the number of workers hired and decriminalisation of minor paperwork errors.

• GST 2.0 (Tax Simplified) – with fewer tax slabs

As mentioned in the Press Note – “India’s Ease of Doing Business framework continues to evolve through a combination of regulatory simplification, digitalisation, and trust-based governance.”

Link: Press Note Details: Press Information Bureau 

Indo-EU and Indo-US trade deals – significance for Regulators:

India’s recent trade pacts with the EU and the US signal a transformative era for its economic diplomacy. These agreements grant India strategic access to the world’s premier markets while ensuring the protection of its critical domestic industries.

 FACTSHEET ON INDIA AND EUROPEAN UNION TRADE AGREEMENT

The factsheet published on January 27, 2026, details the landmark India-European Union Free Trade Agreement (FTA), often referred to as the "Mother of All Deals." This agreement marks a strategic milestone, creating a preferential trade framework for a combined market of 2 billion people with a total GDP of approximately $24 trillion (INR 2,091.6 Lakh Crore).

Market Access for Indian Exports

• India has secured preferential access to the EU for 97% of its tariff lines, covering 99.5% of its trade value.

India’s Offer to the European Union

• India is offering liberalized access for 92.1% of its tariff lines (covering 97.5% of EU exports).

Services and Digital Trade

Services are identified as the "key growth driver" for both economies.

• Mobility: The deal includes a future-ready framework for the movement of professionals (Mode-4), including intra-corporate transferees and independent professionals.

• Sectors Covered: India’s offer covers 102 subsectors, including telecommunications, financial services, maritime, and environmental services.

• Digital: A focus on digitally delivered services and non-discriminatory treatment to boost services exports. 

Reference Link: https://www.commerce.gov.in/wp-content/uploads/2026/01/Factsheet-on-India-EU-trade-deal-27.1.2026.pdf

INDIA-US JOINT STATEMENT

The press release (dated February 7, 2026) outlines a framework for an Interim Agreement between India and the United States, serving as a precursor to a broader Bilateral Trade Agreement (BTA).

Amidst the key highlights of Tariff reductions and increased market access, from both sides, and India’s intent to purchase $500 billion worth of U.S. energy products, aircraft, precious metals, technology, and coking coal over the next five years, there are a few more critical areas discussed between the 2 nations:

Technology and Digital Trade

• Tech Cooperation: Both nations aim to significantly increase trade in technology products, specifically GPUs and data center equipment.

• Digital Rules: They committed to addressing barriers to digital trade and establishing robust, mutually beneficial digital trade rules as part of the upcoming BTA.

Addressing Non-Tariff Barriers

• Regulatory Alignment: India agreed to address long-standing barriers regarding U.S. medical devices, ICT goods (information/communication technology), and agricultural products.

• Standardization: Both countries will discuss aligning standards and testing requirements to simplify compliance for exporters.

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