India’s FTA push: Strategic move or short-term fix?

With the US’s 26% reciprocal tariff on Indian goods set to snap back on July 8th after a 90-day suspension, it’s crunch time for exporters. That’s on top of the standard 10% baseline tariff the US applies on most imports. So, hold on tight - India’s trade strategy is in the spotlight!

So what’s India doing? Reports say the government is eyeing tariff cuts on key imports to soften the blow, while companies are working to lock in deals with American partners.

Did you know? As of 2025, India has 13 active Free Trade Agreements (FTAs)—and is deep in talks for even more, including BITs, CEPAs, and TEPAs.

Bottom line: besides negotiating with the US - FTAs, BITs, CEPAs, and other deals are India’s ticket to dodge tariffs and keep trade humming.

Trade tools simplified

India uses different kinds of trade deals to boost exports, attract investors, and stay competitive. Here’s what they mean:

• FTA (Free Trade Agreement): A deal between two or more countries to lower or remove import taxes. Makes it cheaper to trade goods.

• BIT (Bilateral Investment Treaty): An agreement to protect investments between two countries. Helps investors feel safe putting money into each other’s markets.

• CEPA (Comprehensive Economic Partnership Agreement): A deeper version of an FTA. It covers not just goods, but also services, investments, and more.

• TEPA (Trade and Economic Partnership Agreement): A broad deal focused on trade and long-term cooperation. Still evolving, but gaining traction in global talks.

• PTA (Preferential Trade Agreement): Trade pact that grants certain products preferential access to another country’s market by reducing (but not necessarily eliminating) tariffs.

India’s post-liberation day negotiation blitz

Let’s explore India’s post-liberation day trade hustle - big wins and quick fixes! First up: the headline-grabbing India-UK FTA, followed by a quick scan of others.

India - UK FTA

India and the UK just struck a game-changing free trade agreement - the biggest for the UK post-Brexit - that slashes tariffs on 90% of British goods sold in India, including whisky, cars, and machinery. In return, 99% of Indian exports will enter the UK duty-free, boosting textiles, toys, and jewellery. Viraj Mehta of the World Economic Forum hailed the deal as “crucial in a world of rising trade tensions.”

With trade set to jump by $34 billion a year from 2040, this pact positions both nations for a future of big wins and bigger opportunities. The UK government has described the pact as “the biggest and most economically significant bilateral trade deal the UK has made since leaving the EU”, while Modi has called the agreement “historic”.

On May 6, 2025, after 3 years of negotiations, started in Jan 2022, India and the UK finally wrapped up talks on their landmark FTA, setting the stage for a new trade era. Take a look at the trade numbers!

Source: Commerce Dept

Source: Commerce Dept

Source: Commerce Dept

India - EU FTA

India and the EU’s 27-nation bloc are back at the table! After an eight-year break, talks resumed in June 2022, covering 23 policy areas — from trade in goods/services, investment protection, and GIs to dispute resolution, IP rights, and sustainability.

Talks had stalled in 2013 over market access and regulatory issues. But after Trump’s tariffs rattled global trade, both sides moved to speed things up. On May 1, 2025, they reaffirmed their target to conclude FTA talks by end-2025, and on May 18, 2025, they wrapped the 11th round of negotiations. India’s Commerce Minister Piyush Goyal said on June 10, 2025, they’re “really very near” to clinching the deal.

Why care? The EU takes 17% of India’s exports, while India buys 9% of the EU’s. A deal here could be a game-changer for both!

India - US

India and the US are close to clinching a trade deal! US Commerce Secretary Howard Lutnick said on June 3, 2025, that both sides are working to cut tariffs and reduce the US trade deficit.

US Treasury Secretary Scott Bessent added that India could be the first to finalise a bilateral trade deal to dodge President Trump’s reciprocal tariffs on Indian exports. They are aiming to double trade to $500 billion by 2030.

Other emerging and strategic partners

Source: Time of India, Economic Times, Business Standard

Active FTAs

Other than the ongoing agreements with several countries, India currently has 13 active free trade agreements. Take a look!

Source: India Briefing

How can India benefit?

FTAs are India’s ticket to a more competitive, investment-friendly economy. As Kumar Rajagopalan, CEO, Retailer Association of India puts it, India is “a great place” to tap into global trade benefits, thanks to its young, consumption-driven market and globally competitive exports.

FTAs are cutting tariffs, making high-quality goods cheaper, and driving exports of top-notch “Make in India” products - think chemicals, minerals, and more.

Global trade pact landscape

Now that we’ve dissected India’s trade pacts, let’s take a global spin. Here’s how regional trade deals stack up around the world:

Source: World Trade Organisation

As the snapshot showcases - Europe is miles ahead in the global trade pact race with 178 agreements, showcasing a level of integration that sets the bar for the rest of the world!

Final thoughts

India’s trade playbook is bold, but the real test is in the execution. Deals alone don’t guarantee growth—they need strong follow-through, regulatory clarity, and nimble businesses to thrive. The world’s watching—can India walk the talk and turn potential into profit? The next move could make or break the trade game.