India is negotiating new agreements or expanding existing agreements with the European Union (EU), the Eurasian Economic Union, Mexico, Chile and the South American Mercosur trade bloc.
What you should know
With a trade deal with the US uncertain, India is aggressively seeking alternative trade deals with the aim of opening new markets for exporters and mitigating the impact of tough US tariffs.
Efforts to secure a deal with Washington have so far been inconclusive. Relations between Washington and New Delhi soured in August after US President Donald Trump's administration raised tariffs to 50 percent.
This has not only increased the risk of job losses, but also, experts say, has dented India's long-term ambitions to become a major manufacturing and export hub.
This pressure has led analysts to believe that India is rapidly diversifying beyond its largest market. India signed or advanced four trade deals last year, including a major one with Britain. This is considered the fastest pace of activity in years.
It is also negotiating new or expanding agreements with the European Union (EU), the Eurasian Economic Union, Mexico, Chile and the South American Mercosur trade bloc.
If these efforts are successful, India will have trade arrangements with “almost every major economy,” according to Ajay Srivastava of the New Delhi-based Global Trade Research Initiative. The punitive tariffs imposed by the US to curb oil purchases from Russia have also prompted India to expand into other markets. Trade economist Biswajit Dhar said the strategy is a direct response to the Trump administration’s moves and that it has become imperative for India to expand its destinations.
Such deals are expected to provide relief to labor-intensive sectors hit by tariffs. According to India’s Apparel Export Promotion Council, the deal with the UK will help double its garment exports in the next three years. A possible deal with the EU is expected to yield even bigger gains.
Meanwhile, German Chancellor Friedrich Merz is scheduled to visit India to discuss boosting trade and investment cooperation with Prime Minister Narendra Modi.
Smaller deals are also seen as strategically important. Analysts say the latest deal with Oman will open the door to markets in the Middle East and Africa.
The free trade agreement with New Zealand, while making a limited contribution to export growth, has attracted significant foreign investment and sent a message that India is willing to make a deal.
However, farmers are concerned about exemptions on some agricultural products. India's goods exports rose by 19 percent in November 2025 after a decline in October.
Electronics and marine product exports contributed to this. Exporters' associations said exports to the EU and China increased. But alternative markets cannot fully replace the US, they warned.
