India seeks new trade deals amid US tariff challenges
What's the story
India is aggressively pursuing new trade agreements to ease the impact of high US tariffs and open up markets for its exporters. The move comes as talks with Washington remain stalled. The push for diversification has seen India sign or operationalize four trade pacts last year, including a major one with Britain.
Global outreach
India explores trade agreements with multiple countries
India is now looking at new trade deals or expansion of existing ones with the European Union, Eurasian Economic Union, Mexico, Chile, and South American Mercosur bloc. If successful, these agreements would give India trade ties with nearly every major economy in the world. Ajay Srivastava of the Global Trade Research Initiative (GTRI) said 2025 has been one of the most active years for such agreements.
Strategic shift
US tariffs on Russian oil purchases spur India's diversification
The US has imposed steep tariffs to curb India's imports of Russian oil, which it claims funds Moscow's invasion of Ukraine. This move has prompted India to look for new markets. Trade economist Biswajit Dhar told AFP that this strategy was a response to Trump's actions and is now an imperative for India to expand its destinations.
Economic impact
Trade agreements to boost labor-intensive sectors
Major trade deals are expected to benefit labor-intensive sectors affected by tariffs. India's apparel export promotion council estimates that the UK trade deal could double garment exports to Britain in three years. The potential EU agreement could be even bigger, with European Commission President Ursula von der Leyen calling it the "largest deal of this kind anywhere in the world."
Market access
Smaller trade agreements also play a crucial role
Smaller trade agreements, like the one with Oman in December, could open up markets in the Middle East and Africa. The FTA with New Zealand may not have boosted Indian exports much but secured $20 billion in foreign investment and increased visa access. An Indian commerce ministry official said these concessions show India's willingness to negotiate for better market access.
Export growth
Diversification efforts show positive results
India's goods exports jumped 19% in November 2025, reversing an October dip. The increase was driven by electronics shipments, which are still exempt from US tariffs. Marine product exports also saw a rise during this period. KN Raghavan of the Seafood Exporter Association of India confirmed that diversification has indeed taken place with increased exports to the EU and China.