India accelerates free trade agreements to counter US tariffs and expand exports

NEW DELHI: India has accelerated a push to finalise several free trade agreements over the next few months to offset the impact of steep US import tariffs and to widen export destinations amid growing global trade uncertainty.

New Delhi is in advanced talks with the European Union, New Zealand and Chile, and is set to sign its first agreement under the renewed push with Oman this week, Indian officials said on condition of anonymity because details are not yet public.

Prime Minister Narendra Modi is expected to be in Oman's capital, Muscat, when the India‑Oman free trade agreement (FTA) is signed on Thursday, officials said.

The deal aims to boost bilateral trade and to increase India’s exports of engineering goods, textiles, pharmaceuticals and agricultural products, officials added.

FTAs are a central pillar of India’s economic strategy as it seeks deeper integration into global supply chains, stronger export growth and sustained job creation. By lowering tariffs and setting predictable trade rules, the pacts would help Indian businesses remain competitive and expand access to new markets, officials said.

With global trade increasingly shaped by tariff disputes and geopolitical tensions, India is betting that a wider network of trade agreements will help cushion external shocks and anchor its export ambitions.

The stepped‑up negotiations come as Indian exporters face pressure from higher US import tariffs of 50 per cent, which came into effect in August. While the two countries have been negotiating a bilateral trade agreement, the tariffs have weighed on sectors such as textiles, auto components, metals and labour‑intensive manufacturing.

“India is clearly using FTAs as a strategic tool to diversify export markets and soften the impact of steep and uncertain US tariffs,” trade analyst Ajay Srivastava said.

In all, India has 15 FTAs covering 26 countries and six preferential trade agreements with another 26 nations, while negotiating with more than 50 other partners, Srivastava said. Once the ongoing talks conclude, he added, India will have trade agreements with virtually all major global economies except China.

India signed comprehensive economic cooperation and trade agreements with the UAE and Australia in recent years, lifting bilateral trade with both countries. In May, Britain and India announced they had agreed a hard‑won FTA that will slash tariffs on products including Scotch whisky and English gin shipped to India and on Indian food and spices sent to the UK.

The recent agreements have reinforced the case for faster negotiations and clearer frameworks for business, officials said. “India is negotiating several FTAs at a time of challenges in global trade,” Trade Secretary Rajesh Agarwal told reporters this week. “I see positive progress on several of these next year.”

Despite the renewed momentum, challenges remain as Indian negotiators face pressure to protect small farmers and domestic industries even as trading partners press for greater market access.

India and the US had hoped to secure the first tranche of a bilateral trade agreement by the autumn, but it has not materialised as ties have strained following India’s continued purchase of discounted Russian crude oil, which Washington says helps fund Moscow’s war machine in the ongoing war with Ukraine.

There have been signs of tempers cooling in recent weeks. Modi applauded a US peace plan to end the Russia‑Ukraine war and the two leaders recently spoke by telephone to discuss mutual interests, including trade.

A team of US negotiators led by Deputy Trade Representative Rick Switzer visited New Delhi last week and held talks with Indian officials. Switzer discussed an India‑US economic and technological partnership as well as opportunities to boost two‑way trade, India’s Foreign Ministry said in a statement.

New Zealand’s Trade and Investment Minister Todd McClay met his Indian counterpart Piyush Goyal last week to discuss key aspects of an FTA and to explore ways to advance the negotiations for mutual benefit, Goyal said on X. EU Trade and Economic Security Commissioner Maros Sefcovic also met Goyal last week to review progress on the India‑EU FTA and to explore ways to resolve outstanding issues and advance negotiations.

By RSS/AP