India bets on trade pacts with LatAm to offset tariff hit

India aims to conclude free-trade agreements (FTAs) with Peru, Chile and Mexico on priority, as they could absorb about 20% of goods shipped to the US without major supply-chain changes, said three people close to discussions.

- Dhirendra Kumar

"Indian exporters stand to gain as FTAs with Peru, Chile, and Mexico could open a stronger foothold in Latin America, North America, and trans-Pacific trade, while also creating indirect linkages to Europe and Asia-Pacific markets," said the first of the three people mentioned above.

The push comes after US imposed 50% duties on Indian goods, prompting New Delhi to accelerate efforts to diversify its export basket and cut reliance on the US.

India shipped $86.5 billion worth of goods to the US in FY25, accounting for 20% of its total merchandise exports of $433.56 billion. "Peru, Chile and Mexico together could absorb at least 20% of that volume, or about $17.3 billion worth of Indian goods," the third person said.