Negotiations with US, NZ, Oman, Peru and Chile in progress

India is negotiating free trade agreements (FTAs) with a number of countries including the US, New Zealand, Oman, Peru, Chile, and the European Union, Commerce and Industry Minister Piyush Goyal said on Monday.

The FTA with the EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland), which was finalised in March 2024, will come into effect from October 1, 2025.

He said developed nations are keen to sign FTAs with India, which has already concluded such agreements with the UAE, Australia and the UK. India’s foreign exchange reserves have reached $700 billion.

“Qatar and Bahrain, he said, are also keen to negotiate trade pacts with India. In August, India and the Eurasian Economic Union (EAEU) comprising Armenia, Belarus, Kazakhstan, Kyrgyz Republic and Russia signed Terms of Reference (ToR) to launch negotiations on an FTA,” he said at UP International Trade Show, Greater Noida.

Last week, the minister led an official delegation to New York for trade talks. After that meeting, India and the US decided to continue negotiations for early conclusion of a mutually beneficial bilateral trade agreement.

Both sides held constructive meetings on various aspects of the trade deal.  During the visit, the minister held meetings with United States Trade Representative (USTR) Jamieson Greer and US Ambassador-designate to India Sergio Gor.

These deliberations were important as they took place after the US imposed a 25 per cent reciprocal tariff and an additional 25 per cent penalty on Indian goods entering the American market for purchasing Russian crude oil. At present, a total 50% additional import duty is imposed on Indian goods.

In February this year, leaders of the two countries directed officials to negotiate a proposed Bilateral Trade Agreement.

It was planned to conclude the first tranche of the pact by the fall (October-November) of 2025. So far, five rounds of negotiations have been held. The pact is aimed at more than doubling the bilateral trade to $500 billion by 2030 from the current $191 billion.

The US remained India’s largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at $131.84 billion ($86.5 billion exports).

The US accounts for about 18% of India’s total goods exports, 6.22% in imports, and 10.73 per cent in the country's total merchandise trade.

The Terms of Reference with Eurasia have been finalised, which reflects India’s strong global standing.

Highlighting the recent GST reforms, Goyal said that PM Narendra Modi has gifted the nation a transformative reform during Navaratri. “22 September will be written in golden letters in history. I believe this is the biggest reform since Independence, the impact of which will be felt for decades,” he remarked.

The Minister noted that under the leadership of the Prime Minister, India has transformed from a fragile economy in 2014 to the world’s 4th largest economy today, and will become the 3rd largest economy with a $5 trillion size in the next two years.

He underlined that inflation is at 2%—the lowest in a decade—while GDP growth stood at 7.8% in the last quarter. He also emphasised that India’s banking sector is robust and interest rates have come down.