US, EU among crucial trade deals likely to be finalised in next year

NEw DelhiIndia testament follow up on near a dozen isobilateral merchandise negotiations in 2026, including free trade agreements with economic powerhouses representing over $50 trillion in combined GDP, as New Delhi intensifies efforts to diversify trade partnerships amid growing global protectionism.After concluding three free trade agreements (FTAs) in 2025, India’s priority negotiations next year include deals with the European Union (EU), the US and the Russia-led Eurasian Economic Union (EAEU), according to the commerce and industry ministry’s year-end review.The India-EU FTA is expected to be announced in January 2026, with high-level meetings planned early in the month ahead of an India-EU summit in New Delhi, a person familiar with the matter said, requesting anonymity. HT reported on December 24 that the deal was close to finalisation.The EU, the world’s second-largest economy with a GDP of $19.99 trillion, represents a major market opportunity for Indian exporters. India’s bilateral trade agreement (BTA) negotiations with the US—the top economy with a $31.6 trillion GDP—are also at an advanced stage.Government officials and trade experts expect India to finalise at least three to four major FTAs in 2026.“Bilateral trade agreements are unlocking new opportunities across diverse sectors while also strengthening India’s integration into global value chains,” a ministry spokesperson said, adding that the Indian economy is already witnessing the positive impact of FTAs.India’s ongoing FTA negotiations that will intensify in 2026 include deals with the EAEU (a $2.4 trillion economy comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia), Australia (Comprehensive Economic Cooperation Agreement), Chile, South Korea (upgraded negotiation), Peru, Sri Lanka (Economic and Technology Cooperation Agreement), and the Maldives. It also includes renegotiations with Asean countries (an economy worth over $4 trillion) for a trade in goods agreement.The push comes despite major headwinds. The US imposed 50% additional duties on Indian goods from August, while Mexico substantially raised most favoured nation import tariffs on all countries without bilateral trade deals. India is engaged with both countries to amicably resolve trade issues.“Despite the imposition of steep tariffs by the US in August 2025, bilateral trade talks have continued. In parallel, from a risk mitigation standpoint, due to US tariff volatility, India has accelerated FTA negotiations with other key jurisdictions,” consultancy firm Dhruva Advisors said in its year-end report on Tuesday.Despite geopolitical upheavals and tariff barriers in major markets, India’s merchandise exports rose from $36.43 billion in January 2025 to $38.13 billion in November 2025. Exports strengthened across major product groups and global markets thanks to the resilience of Indian exporters and a trade diversification strategy, the ministry spokesperson said.Recent FTAs have increasingly included investment commitments alongside market access provisions. New Zealand committed to invest $20 billion in India over 15 years in a deal announced on December 22. India’s FTA with the European Free Trade Association (EFTA) bloc—Norway, Switzerland, Iceland and Liechtenstein—which came into force in October, was the first with a $100 billion investment commitment over the next 15 years.“The purpose of FTAs with diverse economies is not just confined to enhancing trade, but they are becoming a mechanism to boost trust between the partners to attract FDI (foreign direct investment),” the ministry spokesperson said.According to the ministry’s year-end brief, India’s gross FDI inflow reached $1.1 trillion from April 2000 to June 2025. Total annual FDI inflow more than doubled from $36.05 billion in 2013-14 to $80.62 billion in 2024-25.During 2025-26 (up to June), India recorded provisional FDI inflows of $26.61 billion, up 17% from the previous year. Over the last 11 financial years (2014-25), India attracted $748.38 billion in FDI—a 143% increase compared to the $308.38 billion received in the previous 11 years (2003-14). Almost 70% of the total FDI inflows of $1,071.96 billion over the past 25 years (2000-25) came during 2014-25.“These figures underscore India’s emergence as one of the most attractive investment destinations globally,” the ministry said.