India accelerates free trade agreements to counter US tariffs and expand
exports
[December 18, 2025] By
RAJESH ROY
NEW DELHI (AP) — India has accelerated a push to finalize several free
trade agreements over the next few months to offset the impact of steep
U.S. import tariffs and widen export destinations during growing global
trade uncertainties.
New Delhi is in advanced talks with the European Union, New Zealand and
Chile and this week is set to sign its first agreement under the renewed
push with Oman, according to Indian officials who spoke on condition of
anonymity as the 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, or FTA, is signed Thursday,
officials said.
The deal aims to boost bilateral trade and push India’s exports of
engineering goods, textiles, pharmaceuticals and agricultural products,
officials said.
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 newer markets.
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 U.S. import tariffs of 50%, which went 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 labor-intensive manufacturing.
“India is clearly using FTAs as a strategic tool to diversify export
markets and soften the impact of steep and uncertain U.S. 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, India will have trade agreements with
virtually all major global economies except China, he added.
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 agreed on a
hard-wrought FTA that will slash tariffs on products including Scotch
whisky and English gin shipped to India and Indian food and spices sent
to the U.K.
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Indian Prime Minister Narendra Modi, right, and his Japanese
counterpart Fumio Kishida sign agreements in New Delhi, March 19,
2022. (AP Photo/Manish Swarup, File)
 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 renewed momentum, challenges remain as Indian negotiators
face pressure to protect small farmers and domestic industries even
as trading partners push for greater market access.
India and the U.S. hoped to have the first tranche of a bilateral
trade agreement by the fall, but it has not come through as ties
have strained following India’s unabated purchase of discounted
Russian crude oil. Washington says the purchases help fund Moscow’s
war machine in the ongoing war with Ukraine.
In recent weeks, there have been signs of tempers cooling. Modi
applauded Trump’s peace plan to end the Russia-Ukraine war and the
two leaders recently spoke over the phone to discuss mutual
interests including trade.
A team of U.S. negotiators led by Deputy Trade Representative Rick
Switzer visited New Delhi last week and held talks with Indian
officials.
Switzer discussed a India-U.S. 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. They discussed key
aspects of an FTA and explored ways to advance the negotiations for
mutual benefits, 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 explore
ways to resolve issues and advance negotiations.
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