Kathmandu. With a trade deal with the US uncertain, India has been aggressively exploring alternative trade deals aimed at opening up new markets for exporters and mitigating the impact of tougher US tariffs. Efforts to secure a deal with Washington remain incomplete.

Relations between Washington and New Delhi nosedived in August when US President Donald Trump’s administration raised tariffs to 50 per cent. Experts say this not only increases the risk of job losses but also hurts India’s long-term ambitions to become a major manufacturing and export hub. Analysts believe that due to these pressures, India is rapidly diversifying outside its largest market.

India signed or implemented four trade agreements last year, including one with the UK. This is considered to be the most intense activity seen in years. It is also negotiating with the European Union (EU), the Eurasian Economic Union, Mexico, Chile and the South American Mercosur trade group for new agreements or extensions.

Ajay Srivastava of the New Delhi-based Global Trade Research Initiative says that if these efforts succeed, India will have trade arrangements with “almost every major economy”. He described 2025 as one of the most active years for trade deals, calling it a risk-averse strategy rather than a complete departure from Washington.

The punitive tariffs imposed by the US to curb oil purchases from Russia have also prompted India to expand into other markets. Trade economist Biswajit Dhar said the strategy was a direct response to the Trump administration’s moves, and it was imperative for India to expand its destinations.

Such agreements are expected to provide relief to the tax-affected labour-intensive sector. According to India’s Apparel Export Promotion Council, the agreement with the UK will help double its garment exports in the next three years. The potential EU deal is expected to yield even bigger benefits. However, Indian negotiators are optimistic that the deadline for concluding the talks by the end of 2025 has been missed.

German Chancellor Friedrich Merz is scheduled to visit India and hold talks with Prime Minister Narendra Modi on ways to boost trade and investment cooperation. Even small agreements are considered strategically important. Analysts say the new deal with Oman will open the door to access to the Middle East and Africa markets.

The Free Trade Agreement with New Zealand has brought in a large amount of foreign investment and sent a message that India is willing to sign the agreement, although it has made a limited contribution to export growth. However, there is concern among farmers due to discounts on some agricultural products.

India’s merchandise exports rose 19 per cent in November 2025 after falling in October. Electronics and marine products exports have contributed to this. Exporters’ associations have reported that exports to the EU and China have increased.

But it warns that alternative markets cannot completely replace the United States. Pankaj Chadha, chairman of the Engineering Export Promotion Council (ECP), said diversification is necessary to reduce dependence on one of the biggest and most lucrative markets.