India forges new trade ties in 2025 to hedge against global uncertainties

India stepped up its efforts to forge new economic and trade partnerships this year, amid growing economic uncertainties in global markets, triggered by the US tariff turmoil. Three major free trade agreements signed by India with the UK, New Zealand and Oman -- and the ongoing talks with the European Union (EU) -- will not only enhance trade but also increase competitiveness, attract quality foreign investment, and provide greater access to high-end technologies and markets.

India has been able to secure fair and equitable deals in these free trade agreements which provide greater access for India’s manufactured goods and skilled professionals in these markets. At the same time, the government has succeeded in protecting India’s agricultural sector from foreign competition to ensure that the livelihood of the country’s farmers is not adversely impacted.

The country concluded a Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom in July this year which provides an unprecedented duty-free access to 99 per cent of India’s exports to the UK, covering nearly 100 per cent of the trade value, benefiting labour-intensive sectors such as textiles, leather, marine products, gems, engineering goods, chemicals, and auto components.

Notably, the agreement goes beyond goods and addresses services, a core strength of India’s economy. India exported over US$ 19.8 billion in services to the UK in 2023, and CETA promises to expand this further.

Additionally, in a first by the UK, mobility for professionals across IT, healthcare, finance, and education is being eased with CETA. This offers streamlined entry for contractual service suppliers, business visitors, intra-corporate transferees, independent professionals.

India’s trade and economic partnership agreement with the EFTA countries- Switzerland, Norway, Iceland, and Liechtenstein, which was signed in 2024, was operationalized in October this year.

The agreement improves market access for over 99 per cent of India’s exports to the region including pharmaceuticals, engineering goods, and services. The four countries have also agreed to invest USD 100 billion in India, which will result in the creation one million jobs.

The India and New Zealand free trade agreement (FTA) signed this month will ensure Zero duty on 100 per cent of India’s exports and will benefit farmers, MSMEs, workers, artisans, women-led enterprises, and youth, while providing immense opportunities for labour-intensive sectors such as textiles, apparel, leather, and footwear.

Sectors like engineering and manufacturing, automobiles, electronics, machinery, plastics, pharmaceuticals & chemicals will also stand to benefit.