India’s recent push for free trade agreements (FTAs) with countries like New Zealand, Oman, the UK, and others reflects a pragmatic strategy to boost exports, diversify markets, and safeguard national interests amid global trade tensions, particularly US tariffs. This approach prioritizes selective, interest-based deals over ideological commitments, allowing India to maximize economic gains while protecting domestic sectors like agriculture and MSMEs.
Key Recent Accords
New Zealand
- India concluded negotiations for an FTA with New Zealand in late 2025, making most goods trade duty-free and signaling a strategic shift toward modest, high-value partnerships. After about 10 months of negotiations, India and New Zealand formally accepted the comprehensive Free Trade Agreement (FTA) on 24th December 2025, when both the prime ministers gave their respective consent during a telephonic discussion. The deal aims to double bilateral trade to around $5 billion within five years and attract up to $20 billion New Zealand investments into India over 15 years.
- India gains zero-duty access for 100% of its exports to New Zealand, eliminating tariffs across all lines. New Zealand secures tariff reductions or elimination on 95% of its exports to India, with over half duty-free from day one, though India protects sensitive sectors like dairy, sugar, and certain agriculture. The FTA includes annexes on financial services, health and traditional medicine (India’s first with New Zealand), and agricultural productivity partnerships.
- Services sectors benefit from enhanced mobility, including visas for Indian IT, engineering, healthcare professionals, AYUSH practitioners, yoga instructors, chefs, and a working holiday visa for 1,000 young Indians annually. Goods trade sees India’s average MFN tariff drop from 16.2% to 9.06% over ten years, boosting exports like textiles while safeguarding MSMEs and farmers. New Zealand targets horticulture gains in honey, kiwifruit, and apples.
Oman
- India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) on December 17-18, 2025, during Prime Minister Narendra Modi’s visit to Muscat, marking a major boost to bilateral trade exceeding $10 billion annually. This pact provides near-total duty-free access for Indian exports while liberalizing imports from Oman in a balanced manner.
- Oman grants duty-free access on 98.08% of its tariff lines, covering 99.38% of India’s exports by value, with 97.96% effective immediately. India liberalizes tariffs on 77.79-78% of its lines, covering 94.81-95% of Omani imports, using exclusions and quotas for sensitive sectors like agriculture, dairy, and bullion.
- Indian labour-intensive exports gain significantly, including textiles, gems and jewelry, leather, footwear, engineering goods, pharmaceuticals, medical devices, automobiles, plastics, and furniture. Oman benefits from easier access to Indian markets, while services like AYUSH (traditional medicine) receive unique commitments across all supply modes
- The CEPA enables 100% FDI by Indian firms in Oman’s major services sectors and enhances professional mobility. It promotes cooperation in blue economy, standards recognition (e.g., Halal, organic), and future social security talks. Implementation is targeted within three months.
UK
- India and the UK signed the Comprehensive Economic and Trade Agreement (CETA), also known as the India-UK Free Trade Agreement (FTA), on July 24, 2025, during Prime Minister Narendra Modi’s visit to London.
- Negotiations began in January 2022 with 14 rounds of talks, concluding in principle on May 6, 2025. The deal aligns with India’s Atmanirbhar Bharat initiative and the UK’s post-Brexit trade strategy, aiming to double bilateral trade to USD 120 billion by 2030.
- India eliminates tariffs on 99% of its tariff lines to the UK, covering nearly all trade value, while reducing duties on 90% of UK lines, with 64% immediate cuts. Specific benefits include lower tariffs on UK whisky (from 150% to 40%), cars (to 10% within quotas), and Indian textiles, gems, and marine products.
- The FTA projects an annual UK economic boost of £4.8 billion by 2040 and £25-26 billion in added bilateral trade. It enhances professional mobility via a Double Contribution Convention, eases customs with 48-hour release targets, and opens government procurement in sectors like healthcare and energy.
- Provisions cover simplified rules of origin, SME support, sustainability cooperation, and future mutual recognition of qualifications. The agreement supports joint ventures in renewables like solar and EVs.
Ongoing talks with the EU, US, Chile, and Brazil aim for completion soon, with targets like doubling US trade to $500 billion by 2030.
Impact of Previous Agreements
Prior to these three agreements, India has already signed 16 other trade and economic cooperation agreements with countries like Australia, UAE, Maurititius, ASEAN, Japan, S Korea etc. On the basis of the outcome of these agreements so far, India has registered surplus trade with two of its free trade partners while registering a trade deficit with others. The, trade deficit with Australia is narrowing. For the last two year. Apart from narrowing the trade deficit, India has exported new products such as pomegranate arils after the trade agreement with Australia was singed on 29th December 2022. These trade agreements are facilitating market access to the new products, promoting FDIs and opening doors for Indian technocrats and entrepreneurs to move abroad.
Pragmatic Rationale
During the course of this push, India is quite pragmatic in its approach when officials reiterate that agreements will only be signed if they serve the national interest. India has made it clear that the interest of small and marginal farmers, fishermen and MSMEs will always be safeguarded and the principle of strategic autonomy to be basis of finalising all these agreements. This realism, evolved from past idealism, allows fluid relations to enhance resilience amid geopolitical shifts and tariff uncertainties. India now has 19 FTAs, shifting focus from new signings to export maximization in sectors like electronics.