India steps up US trade talks amid geopolitical tensions, eyes October FTA with EFTA Bloc

The Commerce Ministry said it remains “fully engaged” with the United States in ongoing trade negotiations, with talks unfolding at ministerial, diplomatic, negotiator, and corporate levels. A key sticking point — Washington’s secondary tariff decision — will hinge on geopolitical developments in the run-up to August 27.

Officials stressed that the additional 25% tariffs currently in play are not rooted in trade disputes but stem from geopolitical considerations, adding to uncertainty for exporters. Many commodities remain under a Section 232 investigation, with clarity yet to emerge.

In response, India is adopting what it calls a “clear-cut strategy” in an unpredictable global policy environment, bolstered by measures across export competitiveness, export promotion, and trade diversification. The country has expanded its focus from 20 to 50 key markets, covering 90% of its export basket.

From April to July 2025, the Agricultural and Processed Food Products Export Development Authority (APEDA) introduced 15 new food products into 28 new markets.

On the FTA front, the pact with the European Free Trade Association (EFTA) — comprising Switzerland, Norway, Iceland, and Liechtenstein — will take effect on October 1, offering Indian exporters concessional duties within eight weeks. The Commerce Ministry has also urged the UK to expedite its FTA implementation.

India’s Economic Cooperation and Trade Agreement (ECTA) with Australia has reached “complete saturation” in utilisation, with 84% of export lines and 86% of import lines covered.

The US remains one of India’s most critical trading partners, and both nations have committed — in a joint statement by their leaders — to engage under a Bilateral Trade Agreement (BTA) framework aimed at doubling trade. Another round of high-level talks is slated for late August, with BTA negotiations targeted for completion by September or October.

Tomorrow, an important meeting will see the US and EU jointly mediating on trade issues.

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