India Pushes Global Trade Deals to Offset US Tariff Impact
These agreements may help Indian exporters partially or fully offset losses in US exports due to high tariffs in the medium to long term
Chennai: While India’s trade talks with the US have hit roadblocks, the country is aggressively pursuing trade and investment deals with several other nations and economic blocs. These agreements may help Indian exporters partially or fully offset losses in US exports due to high tariffs in the medium to long term.
In recent times, India has concluded trade deals with the UAE, Mauritius, Australia, the UK, and the European Free Trade Association (EFTA), which includes Iceland, Liechtenstein, Norway, and Switzerland.
India has also made considerable progress in talks with the European Union, New Zealand, Chile, Peru, the Eurasian Economic Union (EAEU), and Oman. Additionally, India is boosting trade ties with Russia and Sri Lanka, seeking investments from Japan, and easing economic relations with China.
India and the European Union recently concluded the 12th round of trade talks, with the next round scheduled for September. Both sides aim to seal a trade deal by the end of this year.
India and New Zealand have completed the second round of negotiations for a Free Trade Agreement (FTA), with the next round expected in September. Merchandise trade between the two reached $1.3 billion in 2024-25, up nearly 49 per cent from FY24.
India and the EAEU, which comprises Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and Russia, have signed the Terms of Reference (ToR) to formally launch FTA negotiations. The bloc represents a combined GDP of $6.5 trillion and promotes the free movement of goods, services, capital, and labour. Trade between India and the EAEU reached $69 billion in 2024, with the deal expected to benefit Micro, Small and Medium Enterprises (MSMEs).
Talks on the Comprehensive Economic Partnership Agreement (CEPA) with Oman began in November 2023, and a deal is expected soon. Bilateral trade with Oman stood at over $10 billion in 2024-25, with petroleum products and urea being key imports.
India and Chile are actively negotiating a CEPA targeting investments, digital services, and critical minerals. Similarly, India and Peru are expected to finalise an FTA by late 2025 or early 2026. Peru holds significant reserves of rare earth minerals, including terbium, neodymium, praseodymium, and dysprosium.
Meanwhile, recent talks with China yielded assurances on the supply of rare earth elements, fertilisers (especially urea), and tunnel boring machines. In discussions with Russia, India pressed for balancing a $58.9 billion trade deficit that has widened due to oil imports.
Japan is set to announce plans to invest 10 billion yen in India over 10 years, while both nations are working on cooperation frameworks in semiconductors, critical minerals, communications, clean energy, artificial intelligence, and pharmaceuticals.
Additionally, the Federation of Indian Export Organisations (FIEO) has signed an MoU with its Sri Lankan counterpart to boost bilateral trade and collaboration. India-Sri Lanka merchandise trade reached $5.5 billion in FY24, with India’s exports at $4.1 billion and Sri Lanka’s at $1.4 billion.
While negotiations will take time to translate into deals and their implementation, the government will need to provide immediate relief for exporters as the 50 per cent US tariff takes effect.
