Deals, diplomacy & diversification: India’s trade story of 2025
The year 2025 has been nothing short of a rollercoaster ride for businesses across the globe, thanks to Trump’s tariffs, which forced countries to scramble to stitch up trade pacts and collaborations and diversify markets in an effort to deal with the tariff fallouts
As far as India is concerned, if there was one clear signal from its trade playbook in 2025, it was the very intent. The year unfolded as one of the most energetic phases of trade diplomacy the country has perhaps seen in decades, marked by a flurry of signed agreements, concluded negotiations and revived talks with some of the world’s biggest economies in which trade pacts were no longer just policy instruments but strategic tools to diversify and secure export markets, attract investment and future-proof growth in an increasingly fractured global economy.
The headline moments came thick and fast. In July 2025, India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA). This long-anticipated deal finally cracked open near duty-free access for Indian goods into the UK market. For exporters ranging from textiles to engineering products, it marked a decisive shift from preferential access to something close to parity with Britain’s closest trading partners.
A few months later, in October, another milestone was reached as the Trade and Economic Partnership Agreement with the European Free Trade Association, encompassing Switzerland, Norway, Iceland, and Liechtenstein, came into force. While smaller in population, the EFTA bloc carries outsized economic weight, and the agreement signalled India’s willingness to engage deeply with high-income, high-standard markets.
By December, the momentum only intensified. Negotiations with New Zealand concluded, delivering a deal that promised 100 per cent duty-free access for Indian exports alongside a headline commitment of $20 billion in investment from Wellington.
Around the same time, India signed a Comprehensive Economic Partnership Agreement with Oman, strengthening economic ties with a key Gulf partner and reinforcing New Delhi’s broader strategy in West Asia.
Even where full agreements were not yet inked, the groundwork was laid: a set of terms of reference signed with Israel in November set the stage for formal free trade negotiations to follow.
Beyond the signed deals, 2025 was equally notable for the negotiations that edged tantalisingly close to the finish line. Talks with the European Union entered the final stages after years of stop-start engagement, while discussions with the United States continued, reflecting cautious optimism about a bilateral trade arrangement between the world’s two largest democracies.
India also turned its attention east and south, reviewing the ASEAN Trade in Goods Agreement and advancing negotiations with Australia on a Comprehensive Economic Cooperation Agreement, aiming to build on the earlier interim pact.
Taken together, these moves underscored a clear pivot. India is no longer content with incremental trade liberalisation; it is actively stitching together a network of agreements designed to expand market access, diversify export destinations, and anchor itself more firmly in global value chains.
2025 also set the stage for what could be an even more consequential year ahead.
As attention shifted to 2026, the negotiating table is set to become even more crowded. India reportedly plans to intensify talks with the Eurasian Economic Union, a $2.4 trillion bloc comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. Negotiations with Australia are expected to move towards a full-fledged CECA, while discussions with Chile, Peru and the Maldives are also on the agenda.
Existing agreements will also come under scrutiny: India aims to upgrade its pact with South Korea and advance an Economic and Technology Cooperation Agreement with Sri Lanka. Perhaps most complex of all will be the renegotiation of the ASEAN trade-in-goods agreement, which involves an economic bloc worth over $4 trillion and carries deep implications for domestic manufacturing.
This aggressive push is unfolding against a backdrop of mounting headwinds. The United States imposed an additional 25 per cent tariff on many Indian goods, effective August 27, 2025, raising the total to 50 per cent, while Mexico sharply raised its most-favoured-nation tariffs on countries without bilateral trade deals. These moves served as reminders that protectionism is here to stay. However, India, for its part, has remained engaged with both countries, seeking amicable resolutions while doubling down on its broader trade strategy, which, if executed well, experts believe, will reshape India’s trade architecture for the next decade.
Fibre2Fashion News Desk (DR)
