The global trade ecosystem was jolted out of its set ways in 2025 by the US President Donald Trump’s tariffs and countries rushed to secure alternate export markets through trade agreements. India stood out as the frontrunner among nations in signing such deals. However, it was one of the few prominent countries not to have buckled under the US pressure to sign an unequal trade pact with that country despite the hefty Trump tariffs starting to hit exporters from various sectors.
Push for Alternate Markets
In 2025, India signed agreements with the UK, Oman and New Zealand. During the year the agreement with the European Free Trade Association (EFTA) also became operational. Then there is a big one with the European Union (EU) that will likely be finalised by the end of January.
If the achievement of trade diplomacy was substantial in 2025, the groundwork laid in the past 12 months will make 2026 a year of many more such deals.
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So far India has concluded 18 FTAs and by January-end this number will touch 19. Looking at the pipeline by the end of 2026 this number will be much bigger and the only major trade partner that would be out of the web of India’s free trade network will be China. With China there is no inclination for a trade deal nor does it make economic sense due to the large deficit India faces.
“The challenge now is not signing more deals, but making existing ones work. India must urgently review the performance of its FTAs—sector by sector—to ensure they are actually expanding exports, integrating Indian firms into global value chains, and delivering measurable trade gains rather than remaining under-utilised diplomatic trophies,” founder of Global Trade Research Initiative Ajay Srivastava said.
The 2026 Challenge
The biggest trade deal with the US is expected anytime in the first quarter of 2026 if one goes by the statements of top leadership and trade negotiators from both sides. The US deal is being negotiated on two tracks – first involves exchange of concessions that will bring down 50% additional duties on Indian exports. The next step would be a more traditional trade Bilateral Trade Agreement (BTA).
It was a busy year for negotiators as many agreements that were progressing at their regular pace were speeded up. Even before the start of the Trump presidency it was clear that the US would be leveraging its standing as the biggest market to drive trade deals that will impose tremendous burden on its trade partners.
Sensing the change, India and the European Union (EU) announced that they would wrap up negotiations on their Free Trade Agreement (FTA) which had been under discussion since 2022 by the end of 2025. December deadline would pass but by January-end there is all likelihood of the agreement being announced at the India-EU Summit on January 27.
European Commission (EC) President Ursula von der Leyen and European Council President Antonio Costa will be the chief guests for the Republic Day celebrations. Before the summit, Commerce and Industry Minister Piyush Goyal will be visiting Brussels on January 8-9. The visit may see both sides tying up remaining loose ends in the way to the deal.
Among the deals signed this year, the one with the UK is the biggest prize. India–UK Comprehensive Economic and Trade Agreement (CETA) grants duty-free access to 99% of Indian exports, setting the stage for bilateral trade to reach $ 100 billion by 2030 from around $ 56 billion at present.
The second deal that came as the year was drawing to a close was with Oman. It opens zero duty access to 99.38% of India’s exports by value to Oman. A week later the conclusion of the FTA with New Zealand was announced. It will allow 100% exports from India to New Zealand duty-free entry.
Other than goods access, all three agreements also have opened up services sectors for these countries substantially for Indian suppliers. They also have a strong mobility component, guaranteeing access for Indian talent to these markets. They also provide greater flexibility to Indian services providers and companies operating in these companies in hiring from India.
All these agreements would be operationalised in 2026. In between India has got feelers from MERCOSUR bloc of South America that includes Argentina, Bolivia, Brazil, Paraguay, and Uruguay to expand their Preferential Trade Agreement.
Talks with Canada on the Comprehensive Economic Partnership Agreement (CEPA) have started again after a two year gap. Both sides want to speed up the discussions and finalise Terms of Reference at the earliest as they along with China have been the target of maximum trade related measures from the US President Trump.
The Gulf Cooperation Council (GCC) that has discussed FTA with India in fits and starts, wants to get back on the table again. “So many proposals for FTA have been received that we have to keep some of them in abeyance because of the limited resources that can be deployed for negotiations,” a senior official had said.
Other FTAs that can move ahead towards conclusion in 2026 are India Australia Comprehensive Economic Cooperation Agreement (CECA) that expands the Economic Cooperation and Trade Agreement. Significant progress was made in FTAs with Chile and Peru in 2025 and these too could be moving towards conclusion.
Chile and Peru FTAs have chapters on trade in critical minerals. These two countries have large deposits and critical minerals being part of an agreement will reduce the supply shocks that were witnessed this year when China used its dominance of these mineral supply chains to choke the world supply.
Then there is Asean India Trade in Goods Agreement (AITIGA) that is being reviewed and India-Korea CEPA upgradation. Other agreements in various stages of negotiations include India-Sri Lanka Economic and Technology Cooperation Agreement (ETCA), India-Eurasian Economic Union Free Trade Agreement (FTA) and India-Maldives Free Trade Agreement (FTA).
While the line-up looks impressive, in 2026, India’s trade performance will be decided less by external opportunities and more by domestic execution. “With tariffs rising, climate taxes kicking in and geopolitics in flux, export survival—and any growth—will hinge on competitiveness at home: better products, deeper manufacturing, lower costs and effective use of trade agreements. In a hostile global trading system, India’s exports will grow only if policy delivery matches ambition,” Srivastava said.
