To understand this passage we must see how it is fulfilled in the New Testament. The promises that God makes to Abraham and his descendants are fulfilled in the New Testament in Jesus Christ. The same is the case with circumcision which is fulfilled in baptism. Just as the covenant sign of the Old Testament was applied to the infants of the covenant people, so should the covenant sign of the New Testament be applied to the children of the covenant people.
Read Genesis 17:1-4