India's trade strategy is proving resilient amid stalled negotiations with the United States, where 50% tariffs imposed in August 2025 continue to strain ties. US Commerce Secretary Howard Lutnick claimed talks collapsed because Prime Minister Narendra Modi did not call President Donald Trump, a statement India's External Affairs Ministry refuted by citing eight Modi-Trump calls in 2025. Talks paused over holidays but will resume in early January 2026 with new US Ambassador Sergio Gor, focusing on agriculture, digital trade, and tariffs.
Diversification efforts accelerated with four FTAs signed in 2025: the India-UK pact (May 2025, effective H1 2026, boosting garments) and India-Oman CEPA (December 18, 2025, 100% duty-free access to 98% lines as Middle East gateway). Commerce Minister Piyush Goyal's January 8-9 Brussels visit advanced India-EU FTA talks with Commissioner Maroš Šefčovič, covering market access and services ahead of a January 27 summit. Negotiations also progress with Mercosur, Mexico, Chile, and Eurasian bloc for broad coverage.
Exports hit $38.13 billion in November 2025 (+19% YoY), with US shipments up 22.6% to $7 billion despite tariffs; engineering (+24%), electronics (+39%), pharma (+21%) led gains. April-November cumulative exports rose 5.43% to $562.13 billion. Exporters credit diversification to EU/China; Goyal urges trust in India's multi-basket approach. December data pending release around January 15, but trends signal 2026 strength.
