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Modi Highlights Political Stability as Key to Trade Deals

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  Published in Politics and Government on Sunday, February 15th 2026 at 9:22 GMT by moneycontrol.com
      Locales: Delhi, INDIA

Jaipur, Rajasthan - February 15th, 2026 - Prime Minister Narendra Modi underscored the vital role of political stability in attracting investment and securing crucial trade agreements for India, speaking at a rally in Rajasthan on Saturday. The Prime Minister specifically highlighted the recently finalized trade deals with Australia and the United Kingdom as direct results of the sustained political environment fostered by his administration. He framed this stability as a stark contrast to what he described as the inconsistent governance of previous administrations, particularly the Congress party.

"When India got stability, we were able to seal trade deals like Australia and UK," Modi stated, reiterating the connection between a predictable political landscape and successful economic negotiations. He elaborated that this stability isn't merely about the absence of disruption, but actively enables long-term economic planning, something he believes was consistently hampered in the past. "Long term economic planning becomes easier because of stability. Investors gain confidence," he explained, pointing to increased foreign direct investment (FDI) as a key indicator of this confidence.

India has been on a concerted push to broaden and deepen its trade relationships globally. The signing of the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), which came into force on December 29, 2022, represented a significant shift towards greater economic integration with the Indo-Pacific region. The agreement reduced tariffs on a wide range of goods, boosting bilateral trade and creating new opportunities for businesses in both countries. Initial reports indicate a substantial increase in Australian exports of critical minerals to India, supporting India's growing clean energy sector, and increased Indian exports of textiles, leather, and processed food to Australia.

The India-UK Free Trade Agreement (FTA), signed in March 2024 after years of negotiation, is poised to further solidify India's position as a key player in the global economy. While full implementation is still pending as of today, the agreement is expected to reduce tariffs on a vast array of goods and services, creating a more level playing field for businesses in both nations. Experts predict the FTA will lead to a significant boost in UK investment in India, particularly in areas like technology, renewable energy, and infrastructure. Moreover, the agreement aims to streamline regulations and improve intellectual property protection, further enhancing the attractiveness of India as an investment destination.

However, the emphasis on political stability as a prerequisite for economic success has drawn some criticism. Opponents argue that focusing solely on stability overlooks other crucial factors influencing trade, such as global economic conditions, commodity prices, and domestic policy reforms. Some economists also point out that while the AI-ECTA and UK FTA are positive steps, they represent only a fraction of India's potential trade relationships. Increased focus on regional trade partnerships, like those within ASEAN and with countries in Africa, are seen as vital for maximizing India's economic growth.

Beyond trade agreements, the Modi government has also prioritized infrastructure development as a key component of its economic agenda. Massive investments in roads, railways, ports, and digital infrastructure are intended to reduce logistical costs, improve connectivity, and facilitate smoother trade flows. These investments are designed to position India as a more efficient and competitive manufacturing hub, attracting foreign companies seeking to diversify their supply chains. The Bharatmala Pariyojana and Sagarmala projects, ambitious road and port development programs respectively, are prime examples of this commitment.

Looking ahead, the Indian government is actively pursuing further trade agreements with the European Union, Canada, and other key economic blocs. The Prime Minister's emphasis on political stability is intended to send a clear message to potential investors and trading partners: India is a reliable and predictable partner, committed to fostering long-term economic growth. The challenge will be to balance the pursuit of stability with the need for inclusive growth and addressing persistent socio-economic inequalities. Furthermore, maintaining consistent policy frameworks, even as global dynamics shift, will be critical to sustaining the momentum achieved in recent years and solidifying India's position as a leading global economic power.