Searching Deals Amid Deadlocks

India, in the midst of global tariff tensions, has an onerous task of navigating tricky negotiations with the US and others in order to boost its exports, protect farmers, and secure a balanced, forward-looking trade policy

- DIPANKAR DEY

India successfully concluded a 'historic and ambitious deal' with the UK on May 6, just a few hours before striking the terrorist camps in the Pakistan-Occupied Kashmir (POK). The country is also at various levels of trade negotiations with several economies, including the EU, the USA, New Zealand, Chile, Oman, Saudi Arabia, Qatar, the Gulf Cooperation Council (GCC), and others. India and the EU have decided to conclude negotiation for an FTA by the end of this year. Since February 2025, after a meeting between the Indian Prime Minister and the US President, both the countries have been actively negotiating a Bilateral Trade Agreement (BTA) to increase their bilateral trade to USD 500 billion by 2030. The first phase of the pact, targeting to be finalised by the fall of 2025, aims to reduce or eliminate customs duties and ease norms for trade in services and investment.

Several trade negotiations are being held at a time when India's trade deficit is increasing due to a steady increase in imports. Merchandise export has remained almost stagnant. India's total export during FY 2024-25 (April-March) is estimated at USD 820.93 billion, registering a positive growth of 5.50 per cent due to the rising export of services. And the total import during FY 2024-25 (April-March) is estimated at USD 915.19 billion, registering a growth of 6.85 per cent. The trade deficit in 2024 was wider than the previous year's deficit of USD 73.51 billion. The cumulative value of merchandise exports during FY 2024-25 (April-March) was USD 437.42 billion, registering a positive growth of only 0.08 per cent, as compared to USD 437.07 billion during FY 2023-24 (April-March).