PM Modi's Diplomacy Dividend in 2026: From Defence Deals to FTAs

In

the first seven months of 2026, the Narendra Modi government has delivered what officials describe as one of its most productive diplomatic and economic sprints yet.From finalizing FTAs with the EU and UK, to approving Rs 52,000 crore in domestic defence purchases and sealing a $630 million missile export deal with Indonesia, the period between January and July 2026 has seen over $37 billion in defence, disinvestment, and trade outcomes.The push comes as PM Modi completed his 100th foreign trip in June 2026, covering 78 countries since 2014. Between January and July this year alone, he undertook 8 major foreign tours covering 14 countries.

Trade, the biggest headline

3 FTAs in 7 Months1. India-EU FTA January 2026After nearly two decades of negotiations, India and the EU finalized the broad contours of a Free Trade Agreement. The deal creates a $27 trillion combined market.As per Commerce Ministry projections, it is expected to add $50 billion in Indian exports by 2030, with major gains in textiles, leather, gems & jewellery, agriculture, and IT services.2. India-UK CETA Effective July 2026The Comprehensive Economic and Trade Agreement with the United Kingdom takes effect this month. It provides tariff concessions to key Indian exports including textiles, footwear and engineering goods.3. India-NZ FTA April 2026The India–New Zealand Free Trade Agreement was officially signed in New Delhi on April 27, 2026. It is pending ratification by both sides. For India, the biggest gain is immediate zero-duty access for 100% of its exports to New Zealand, removing tariff barriers of up to 10% that earlier hit key sectors like Indian textiles, engineering goods, leather products and pharmaceuticals. On the other side, New Zealand has committed to facilitate $ 20 billion in investments into India over the next 15 years. The agreement further covers 118 service sectors and creates a new visa pathway for 5,000 skilled Indian workers. The FTA is projected to help double bilateral trade to $5 billion by 2030 from $1.8 billion currently.

https://www.youtube.com/watch?v=9C0yajIWZE4

The India–New Zealand Free Trade Agreement (IN–NZ FTA)

Big on Exports, Bigger on Domestic Procurement. Defence has emerged as both a diplomatic and domestic growth engine. Exports: $630 Million Indonesia DealIn July 2026, during his visit to Jakarta, PM Modi oversaw the signing of a $630 million (Rs 5,250 crore) agreement to export BrahMos supersonic cruise missiles and Astra air-to-air missiles to Indonesia.The deal includes missile systems, infrastructure, training, and maintenance. Indonesia becomes the second country to procure BrahMos after the Philippines and the first export customer for Astra.The agreement is being seen as a key pillar of India’s ‘Act East’ Policy. Bilateral trade with Indonesia reached $28.15 billion in 2024-25 with a new target of $50 billion by 2030.

https://www.youtube.com/watch?v=hjr9_1EQEhg

Domestic Acquisitions: Rs 52,000 Crore Push

On the home front, the Defence Acquisition Council has approved proposals worth Rs 52,000 crore ($6.2 billion) in July 2026 for Kamikaze drones, missile systems and advanced military technology for the armed forces.This followed 2 significant contracts:

• May 2026: A Rs 1,476 crore contract with Bharat Electronics Limited for army systems
• April 2026: A Rs 975 crore deal for battlefield mobility and anti-mine equipment awarded to domestic firms.

India’s defence exports also hit a record Rs 38,424 crore in FY26 compared to just Rs 162 crore in 2004. The government has set a target of Rs 50,000 crore by FY29.The 14-Country Scorecard: Sectoral Wins Beyond FTAsPM Modi’s eight tours have delivered targeted outcomes across energy, tech, maritime and manufacturing:West Asia & Europe: UAE: $1 Billion 8 Exaflop AI cluster with G-42, $120 Million ship repair JVNetherlands: €2.3 Billion (Rs 21,000 Cr) Tata-ASML chip equipment deal, $4 Billion Green Hydrogen potentialFrance: €7.5 Billion for Rafale-Marine and Scorpene, €15 Billion for Jaitapur nuclear reactorsIndo-Pacific:

• Australia: $27 Billion bilateral trade, $500 Million Critical Minerals pipeline
• Seychelles: $50 Million defence line of credit, $100 Million development grant

Among others, Malaysia has set a $30 Billion trade target, Israel signed $500 Million in defence tech MoUs and Sweden, Norway, Italy, Slovakia added climate, digital and manufacturing agreements.Now here's why the numbers matter. They tell a story about how diplomacy has moved from the table to the ground.Moreover, the January to July 2026 period marks a clear shift in India’s foreign policy — from negotiations to actual delivery.First, there is scale. In just 7 months, the government has unlocked over $37 billion across defence deals, trade agreements and disinvestment proceeds.Second, market access. With FTAs signed or finalized with the EU, UK and New Zealand, along with an interim framework with the US, India has secured preferential access to economies worth more than $30 trillion combined.

https://www.youtube.com/watch?v=wf5wng1wt-E

Third, Aatmanirbhar Bharat. The approval of Rs 52,000 crore in domestic defence procurement, along with record defence exports of Rs 38,424 crore in FY26, these figures display India can both buy local and sell global.Fourth, a fiscal push. Asset sales and monetization worth Rs 37,093 crore have been mobilized to fund infrastructure and welfare spending.From Brussels to Jakarta, the Modi government’s 2026 agenda has been defined by one metric-Deliverables.Finally, it's a matter of strategic depth. The $630 million defence export to Indonesia and new Indo-Pacific partnerships reinforce India’s ‘Act East’ policy and presence in the region. Clearly, 7 months and 14 countries has translated into 3 FTAs and $37 billion in measurable outcomes.