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

India moved to accelerate negotiations for a series of free trade agreements over the coming months to offset steep U.S. import tariffs and broaden export destinations. 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 because details are not public. Prime Minister Narendra Modi is expected to be in Muscat when the India-Oman free trade agreement is signed Thursday. The deal aims to boost bilateral trade and lift exports of engineering goods, textiles, pharmaceuticals and agricultural products.

FTAs are a central pillar of India’s economic strategy, designed to deepen integration into global supply chains, spur export growth and sustain job creation. By lowering tariffs and establishing predictable trade rules, the pacts would help Indian businesses remain competitive and access newer markets. With global trade increasingly shaped by tariff disputes and geopolitical tensions, India is betting that a wider network of trade agreements will cushion external shocks and anchor its export ambitions. The negotiations come as Indian exporters face higher U.S. tariffs of 50%, which took effect in August, weighing 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,” said trade analyst Ajay Srivastava.

In total, India has 15 FTAs covering 26 countries and six preferential trade agreements with another 26 nations, with talks ongoing with more than 50 partners. Once the current rounds conclude, India would be positioned to have trade agreements with virtually all major global economies except China, Srivastava said. Earlier agreements with the UAE and Australia have lifted bilateral trade, and in May Britain and India announced a hard-won FTA that would slash tariffs on Scotch whisky and gin to India and Indian food and spices to the U.K. Officials described the recent wave of deals as a signal to business that negotiations will proceed more quickly in coming months.

U.S.-India talks have been slower; a team of U.S. negotiators led by Deputy Trade Representative Rick Switzer visited New Delhi last week to discuss a wider economic and technological partnership and to explore opportunities to boost two-way trade, according to India’s Foreign Ministry. New Zealand’s Trade and Investment Minister Todd McClay met Indian Trade Minister Piyush Goyal last week to discuss FTA progress, while EU Trade and Economic Security Commissioner Maros Sefcovic also met Goyal to review the India-EU FTA and explore ways to resolve issues and move negotiations forward.

Industry observers say momentum in negotiations could help cushion external shocks and maintain India's export trajectory amid a volatile global trade backdrop.