India’s trade strategy in a multipolar world, Pg6

Key Highlights:

• India aims to increase exports to $2 trillion by 2030 under the updated Foreign Trade Policy (FTP).
• In 2025, India's total exports reached $825.25 billion, a 6.05% annual increase.
• The India-EU Free Trade Agreement, signed on January 27, 2026, will reduce or eliminate tariffs on over 90% of traded goods.
• In early February 2026, India and the U.S. signed a framework for an interim agreement on reciprocal trade.

Detailed Insights:

• India shifted from a cautious approach to a proactive trade strategy, aiming for deeper integration with advanced economies like Australia, the EU, the UAE, the U.K., and the U.S..
• By 2026, India’s network of FTAs is projected to cover nearly 71% of its total export basket, a significant increase from approximately 22% in 2019.
• The India-EU FTA is expected to boost market access for Indian exporters in sectors like textiles, leather, pharmaceuticals, chemicals, and marine products.
• The interim trade agreement between India and the U.S. prioritizes strategic collaboration in critical sectors such as rare earths and semiconductors.
• India's trade strategy includes boosting domestic manufacturing through production-linked incentives and infrastructure expansion while deepening global integration.
• These trade agreements aim to strengthen supply chains, promote digital and services trade, and integrate into global value chains, positioning India as a leader in global commerce.

Key Concepts Involved:

• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate trade barriers such as tariffs and quotas.
• Global Value Chains (GVCs): The full range of activities that firms and workers do to bring a product from its conception to its end use.
• Strategic Autonomy: A country's ability to pursue its foreign policy and security interests without undue influence or coercion from other actors.