EU, UK, and EFTA to become alternatives to US market; India prepares free trade agreements with multiple countries

India is exploring markets beyond the US to export its goods. A trade agreement with the European Free Trade Association (EFTA) countries will also come into effect from October 1st.

India is rapidly seeking alternative markets in response to the imposition of hefty tariffs of up to 50% on Indian products in the United States. Following a free trade agreement (FTA) with Britain, a similar agreement with the European Union (EU) is anticipated next month. Sources indicate that negotiations between India and the EU on a trade agreement are nearing completion, with a potential announcement expected in September following political-level discussions.

Agreement with the European Free Trade Association to be implemented

Meanwhile, a trade agreement reached with the European Free Trade Association (EFTA) countries will come into effect from October 1st, enabling duty-free or significantly reduced-duty exports of Indian goods to four prosperous European nations.

Trade deal with Britain to also come into effect

India has also concluded a trade agreement with Britain, which is expected to be implemented within the next few months. This will facilitate duty-free exports of Indian goods to European countries. Along with Britain, France, Germany, and Italy (members of the EU) are developed nations where Indian exports will receive significant encouragement. Ministry sources suggest that the existing trade agreement with Australia may also be expanded. India is also negotiating a trade agreement with New Zealand, and another agreement with Oman is expected next month. The implementation of these agreements will take a few months.

Relief measures planned for employment-generating sectors

The central government is preparing to counter the impact of the 50% US tariff. Sources suggest that the government is focusing on labour-intensive industries, including textiles and gems and jewellery. Significant relief measures for these sectors are being prepared.

Government's five key strategies

Support Scheme: The central government is preparing a ₹25,000 crore support scheme for affected exporters.

Accelerated Trade Talks: Trade talks with the European Union, Chile, New Zealand, and Peru will be expedited.

Linking Clusters: Textile production clusters like Surat, Tirupur, and Bhadohi will be connected to international opportunities.

Strengthened Brand India Campaign: Participation in international exhibitions and trade fairs under the Brand India campaign will be ensured.

RBI Preparedness: The Reserve Bank of India (RBI) will hold meetings with representatives from various sectors to provide assistance to affected sectors.