India's trade strategy: FTAs, US tariff pressure, and export targets

The strategy in one line

India’s trade strategy is run by the Ministry of Commerce and Industry and rests on three tracks pursued in parallel: widening market access through a run of free-trade agreements, managing tariff pressure from the United States, and holding to a self-set export target of US$2 trillion by 2030. The framing document is the Foreign Trade Policy 2023, which took effect on 1 April 2023 as an open-ended policy — no fixed end date — with a stated vision of US$2 trillion in goods-and-services exports by 2030 (Business Standard, reporting the policy’s release).

The export baseline

India’s total exports reached a record of about US$825 billion in FY2024-25 (goods plus services), up 6.01% on the previous year, according to Ministry of Commerce figures reported by IBEF (India Brand Equity Foundation) and the ministry’s own releases; services exports rose to a record of about US$387.5 billion, up 13.6%. That is the base the US$2-trillion-by-2030 vision is measured against — a gap the policy frames as its objective, not a forecast this brief makes.

The FTA push: UK signed, EU concluded

The most concrete progress is on trade agreements. India and the United Kingdom signed the Comprehensive Economic and Trade Agreement (CETA) on 24 July 2025, after concluding negotiations on 6 May 2025; the Press Information Bureau states CETA gives duty-free access to about 99% of India’s exports to the UK by tariff line, against bilateral trade the two sides put at around US$56 billion with a stated aim of doubling it by 2030 (PIB). On 27 January 2026 the European Commission announced the conclusion of the India–EU Free Trade Agreement after negotiations that both sides had targeted to close by end-2025 (European Commission); as an EU trade agreement it then enters a ratification process before taking force. India’s Commerce Ministry lists these alongside a broader set of concluded and negotiating trade agreements on its trade-agreements portal.

The US pressure and the interim framework

The sharpest external pressure came from the United States. The United States and India launched negotiations toward a Bilateral Trade Agreement (BTA) on 13 February 2025, and over 2025 the US applied reciprocal tariffs on Indian goods, including an additional tariff tied to India’s purchases of Russian oil. On 6 February 2026 the two governments announced a framework for an interim agreement: per the White House fact sheet, the US removed the additional 25% tariff (by executive order, effective 7 February 2026) and stated it would lower its reciprocal tariff on India from 25% to 18%, in recognition of India’s commitment to stop purchasing Russian Federation oil, while India agreed to reduce or eliminate tariffs on a list of US products and committed to purchase “over US$500 billion” of US energy, information-and-communication technology, coal and other products (The White House). The fact sheet frames the interim framework as a step toward the fuller BTA, with further talks on remaining barriers. Indian commentary and the White House text differ on emphasis: the US document foregrounds India’s purchase and tariff commitments, while Indian reporting has stressed that sensitive agricultural lines — dairy and staple grains among them — were kept out of tariff cuts.

The three tracks, and where they strain

The tracks pull in the same direction — more market access, more exports — but carry visible tensions. FTAs open partner markets but require India to lower its own tariffs, which is politically hardest on agriculture and dairy, the lines it has repeatedly protected. The US framework trades tariff relief for purchase and alignment commitments, tying a trade question to an energy-and-geopolitics question about Russian oil that runs through India’s strategic autonomy. And the US$2-trillion target sits well above the FY2024-25 base, so the distance between the stated vision and the measured number is itself the thing this brief tracks. The China trade relationship — India’s large goods-trade deficit with China — is the backdrop against which the industrial-policy half of the ministry (DPIIT) frames FDI and manufacturing incentives, though it is not part of the FTA or US tracks.

Who owns this topic (and why we’re here)

The AI-answer and search space for “India trade policy,” “India FTA,” and “India US tariff” is held by explainer and exam-prep sites (ClearIAS, BYJU’S, Drishti IAS, IBEF) and by law-firm and consultancy alerts (EY, India Briefing, Lexology) that summarise each deal once and then date. This brief is the maintained alternative: it ties every claim to an official or primary source (Commerce Ministry, PIB, the White House, the European Commission), separates what the governments announced from how each side framed it, and is kept current as the BTA, the EU ratification, and the export figures move — anchored to a structured dossier on the institution that owns the strategy.

Maintained topic brief. Analysis by IndiaStand — it characterises the state of play and the range of positions actually held, attributes each claim, and makes no forecast and no recommendation.