India's Free Trade Agreements in 2025: Expanding Global Partnerships for Economic Growth

Explore India's Free Trade Agreements in 2025, their impact on global trade, economic growth, and strategic partnerships with key nations. Stay updated on India’s evolving trade landscape.

Feb 25, 2025 - 20:49 Updated: Feb 25, 2025 - 21:17

0 134

India's Free Trade Agreements in 2025

As of February 2025, India is actively expanding its global trade footprint through a series of Free Trade Agreements (FTAs) and Comprehensive Economic Partnerships (CEPs) with various countries and regional blocs. These agreements aim to enhance market access, reduce trade barriers, and foster economic cooperation.

India’s FTA landscape in 2025 builds on a foundation of existing agreements while advancing negotiations with key partners. Historically, India has FTAs with countries like Japan, South Korea, and the ASEAN bloc, which have boosted sectors such as textiles, pharmaceuticals, and IT services by reducing trade barriers.

More recently, agreements like the Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates, finalized in 2022, have shown tangible results—exports to the UAE grew by over 11% in FY23, reaching $31.3 billion, with gains in gems, jewelry, and engineering goods. Similarly, the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) countries—Iceland, Liechtenstein, Norway, and Switzerland—signed in 2024, promises a $100 billion investment over 15 years, targeting manufacturing and green technology.

India is actively expanding its global trade footprint through a series of Free Trade Agreements

Below is an overview of India's recent and ongoing trade negotiations:

1. India-United Kingdom Free Trade Agreement (FTA):

Resumption of Talks: After a year-long pause due to general elections in both countries, India and the UK have resumed negotiations for a bilateral FTA. The discussions aim to double or even triple bilateral trade from the current USD 20 billion over the next decade. Key areas of focus include reducing tariffs on goods, enhancing services trade, and facilitating investments.

2. India-European Union (EU) FTA:

Advancing Negotiations: India and the EU are progressing in their FTA discussions, with the next round scheduled for March 10-14, 2025, in Brussels. A delegation from the European Commission is set to visit India on February 28, 2025, to prepare for these talks. The agreement seeks to bolster trade in goods and services, with particular emphasis on market access and investment opportunities.

3. India-Qatar Trade Relations:

Aiming to Double Trade: India and Qatar have set an ambitious goal to double their trade volume to $28 billion over the next five years. Discussions during the Qatari Emir's visit to New Delhi focused on enhancing cooperation in energy and exploring the possibility of a free trade agreement.

4. India-United States Trade Relations:

Mission 500: The United States and India have launched an initiative dubbed "Mission 500," aiming to more than double bilateral trade to $500 billion by 2030. Plans are underway to negotiate a multi-sector Bilateral Trade Agreement (BTA) by the fall of 2025, focusing on increasing market access, reducing tariffs, and deepening supply chain integration.

5. India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA):

Strengthening Ties: India signed a TEPA with EFTA members—Switzerland, Norway, Iceland, and Liechtenstein—on March 10, 2024. The agreement is expected to come into force by late 2025 or early 2026, significantly reducing tariffs on Swiss exports to India and enhancing trade relations.

6. India-Australia Economic Cooperation and Trade Agreement (ECTA):

Deepening Economic Relations: Signed in December 2022, the ECTA between India and Australia has led to increased collaboration in sectors such as agriculture, services, digital trade, and green industries. Both nations are working towards a Comprehensive Economic Cooperation Agreement to further eliminate tariffs and other trade barriers.

7. India-Israel Free Trade Agreement:

Advancing Negotiations: Israel and India are seeking to finalize a long-discussed free trade agreement within the year. This development aligns with broader initiatives to enhance economic corridors connecting India, the Middle East, and Europe.

Economic Cooperation and Trade Agreement

Looking at 2025 specifically, India is on track to deepen ties with several major economies. Negotiations with the United Kingdom, relaunched after a pause, are set to resume this year following bilateral talks at the G20 Summit in November 2024. This FTA could unlock $15 billion in trade by 2030, focusing on sectors like pharmaceuticals, apparel, and technology, though sticking points like migration policies and economic offender repatriation remain.

Talks with the European Union, revitalized in recent years, are also progressing, with hopes of nearing completion by late 2025. This deal could amplify India’s renewable energy and automotive sectors, given Europe’s strengths in clean tech and India’s manufacturing ambitions. Additionally, India is exploring an FTA with the Eurasian Economic Union (Russia, Belarus, and others), which could enhance energy security and agricultural trade.

These agreements are driving economic growth in multiple ways. Lower tariffs—often reduced by 80-100% in FTAs—make Indian goods more competitive abroad, while cheaper imports of raw materials cut production costs at home. The EFTA deal, for instance, secures access to critical minerals for India’s electric vehicle push, while the UAE CEPA has spurred jewelry exports. Foreign direct investment is another boon; the $100 billion EFTA commitment dwarfs earlier inflows and signals confidence in India’s market. Job creation follows, especially in export-oriented industries like textiles and electronics, where firms like Foxconn are scaling up production.

Yet, challenges linger. India’s domestically focused economy, driven more by consumption than exports, has historically made it cautious about FTAs. Commerce Minister Piyush Goyal noted in 2024 that some existing deals have “hurt” local industries, prompting a reassessment of terms to protect small businesses and farmers. Agriculture, a sensitive sector, is often excluded or heavily guarded in negotiations. Geopolitical shifts, like U.S.-China tensions, also shape India’s strategy, pushing it toward regional supply chains and away from over-reliance on any single market.

global trade footprint through a series of Free Trade Agreements

Advancing Negotiations: Israel and India are seeking to finalize a long-discussed free trade agreement within the year. This development aligns with broader initiatives to enhance economic corridors connecting India, the Middle East, and Europe.

India-UK FTA: Negotiations have been ongoing, with both sides aiming to finalize a deal that benefits sectors like IT, pharmaceuticals, and services.
India-EU FTA: Talks have resumed after a hiatus, focusing on reducing tariffs and improving market access.
India-Australia ECTA (Economic Cooperation and Trade Agreement): Already in effect, this agreement aims to increase trade in goods and services.
RCEP (Regional Comprehensive Economic Partnership): India opted out of this mega-trade deal but continues to explore bilateral agreements with RCEP members like Japan and South Korea.
India-UAE CEPA (Comprehensive Economic Partnership Agreement): Signed in 2022, this agreement has already boosted trade between the two nations.

If you are looking for details about India's FTAs in 2025, you may want to explore the following sources for updated and reliable information:

Government of India Websites: Check the Ministry of Commerce and Industry or the Department of Commerce for official updates on FTAs.
News Outlets: Reputable sources like The Economic Times, Business Standard, Livemint, and The Hindu often cover FTA developments.
International Organizations: The World Trade Organization (WTO) or UNCTAD may provide insights into global trade trends and agreements involving India.
Think Tanks and Research Institutions: Organizations like the Indian Council for Research on International Economic Relations (ICRIER) or Brookings India often publish reports on trade policies.

On the horizon, India’s FTA strategy is evolving to prioritize digital trade, sustainability, and innovation. The digital economy, projected to add $1 trillion to GDP by 2025, is a focal point in talks with the UK and EU, while renewable energy collaboration features prominently with Europe and Japan. The India-Middle East-Europe Economic Corridor, highlighted by Prime Minister Narendra Modi in early 2025, aims to link these regions, amplifying trade opportunities.

In essence, India’s FTAs in 2025 are a balancing act—expanding global partnerships to fuel growth while safeguarding domestic interests. If executed well, they could position India as a linchpin in a shifting economic order, blending its demographic and democratic strengths with a more connected, competitive market presence.

These strategic trade initiatives reflect India's commitment to integrating more deeply into the global economy, diversifying its trade partnerships, and fostering economic growth through enhanced international cooperation.