- Potential 50% US tariffs threaten job losses.
- India will increase exports to EU, China: exporter.
- Diversification vital to reduce dependence.
MUMBAI: India is aggressively looking for commerce offers to open markets for exporters and soften the blow of steep US tariffs, as efforts to safe an settlement with Washington stay elusive.
Relations between Washington and New Delhi plummeted in August after President Donald Trump raised tariffs to 50%, a blow that threatens job losses and hurts India’s ambition of turning into a producing and export powerhouse.
That strain, consultants say, has pushed New Delhi right into a fast diversification drive past its largest market.
India signed or operationalised 4 commerce agreements final 12 months, together with a serious pact with Britain — the quickest tempo of dealmaking it has seen in years — and is now eyeing recent offers.
Negotiations are underway with the European Union, the Eurasian Financial Union, Mexico, Chile and the South American Mercosur commerce bloc, both for brand spanking new offers or to increase current agreements.
If profitable, India would have commerce preparations with “nearly each main financial system”, stated Ajay Srivastava, from the New Delhi-based International Commerce Analysis Initiative (GTRI).
Srivastava stated 2025 was “one of the vital energetic years” for commerce agreements, which he stated aimed to “unfold danger” quite than to pivot from Washington.
Growth of locations
Washington’s punishing tariffs aimed toward stopping India’s purchases of Russian oil — which it says funds Moscow’s invasion of Ukraine — have pushed New Delhi’s need to develop different markets.
“The technique was a response, as I learn it, to what Trump did,” commerce economist Biswajit Dhar instructed AFP. “This has now develop into an crucial for India to truly increase its locations.”
Main offers will assist labour-intensive sectors harm by tariffs.
India’s attire export promotion council initiatives that the UK commerce deal may assist double garment exports to Britain over the following three years.
The positive factors from a possible EU settlement could possibly be even greater.
European Fee President Ursula von der Leyen, anticipated to go to New Delhi later in January, has stated it could be the “largest deal of this type anyplace on the planet”.
Though the 2 sides missed a deadline to conclude talks by the tip of 2025 — reportedly over disputes associated to metal and auto exports — Indian negotiators stay optimistic.
German Chancellor Friedrich Merz will go to India and meet Prime Minister Narendra Modi on Monday, holding talks on “intensifying cooperation in commerce and funding”, Modi’s workplace stated in a press release.
Smaller agreements additionally matter.
Commerce between Oman and India totalled lower than $11 billion final monetary 12 months, however a December take care of Muscat provides “a gateway to the broader Center East and Africa markets”, and a template for a wider “Gulf engagement technique”, analysts at Nomura instructed.
And whereas a free commerce settlement (FTA) with New Zealand added little to Indian export progress, it secured $20 billion in international funding, elevated visa entry and confirmed Washington that New Delhi is prepared to compromise.
“The New Zealand FTA makes concessions on agricultural produce like apples, regardless that farmers right here might have issues,” stated an Indian commerce ministry official, who declined to be recognized.
“Who says we won’t be versatile?”
‘Eggs in a single basket’
India’s items exports rose a shocking 19% in November 2025, reversing an October decline. Whereas the surge was helped by electronics shipments — nonetheless exempt from US tariffs — marine product exports additionally posted positive factors.
“Diversification has definitely occurred,” KN Raghavan, of the Seafood Exporter Affiliation of India stated.
“We’ve got elevated exports to the EU and China,” he stated, including they had been the highest markets after the US.
However exporters warning that different markets can not absolutely substitute the USA, with Raghavan saying a US deal is “paramount”.
That continues to be in limbo.
India’s imports of Russian oil fell sharply in December to 1.2 million barrels per day from 1.8 million per day in November, in response to Kpler commerce information.
It’s unclear if that might be sufficient for Trump.
Pankaj Chadha, chairman of the Engineering Export Promotion Council, stated diversification had develop into a necessity to reduce dependence on the “largest and essentially the most profitable” market.
“It is higher to not put all of your eggs in a single basket,” he stated.
