2025 was a pivotal and defining year for India’s trade diplomacy. The country advanced multiple bilateral Free Trade Agreements (FTAs) and trade partnerships that diversify market access and signal geopolitical realignment. Be it the Comprehensive Economic & Trade Agreement (CETA) (Government of India, Department of Commerce, 2025) with United Kingdom, preliminary talks of a Bilateral Trade Agreement with the USA (Ind-US Joint Statement, 2025) and ongoing negotiations with EU, Australia, New Zealand, Global South nations and many other(PIB Year End, 2025), India has made significant progress. Yet, variations are deep. Landmark gains coexist with stalled talks and unresolved implementation challenges. This scorecard evaluated major tracks, their economic significance, political constraints, and outstanding risks.
India – UK CETA – Fostering Unprecedented Partnerships
July 2025 witnessed the landmark India-UK CETA, a culmination of negotiations spanning over three years. This unprecedented trade deal is by far the UK’s largest negotiated deal since Brexit and India’s biggest agreement with a G7 economy in over a decade(Mahajan, 2025).
To succinctly delve into the specifics, under the CETA, the UK will offer duty-free access to 99% of Indian items, according to the Indian commerce ministry, covering nearly 100% of trade value (Kumar & Smout, 2025). A comprehensive trade and economic agreement providing near duty -free access for the vast majority of bilateral trade and substantial liberalisation across goods and services characterises the CETA.
In overall terms, India’s average tariffs on UK goods will see a sharp fall from 15% to a mere 3%(Kumar & Smout, 2025). The agreement could unlock USD23 billion in new opportunities for India in terms of trade with the UK(Sahoo, 2025). Exporters for India for a number of goods are likely to have zero duties (Kumar & Smout, 2025), which is a major shift from an earlier 4%-16% in the UK. The benefits of this deal go deep into the economy by opening doors for Indian farmers to a market as big as USD 37.5 billion in the UK (Kumar & Smout, 2025).
For firms back in the UK, an economy galloping like that of India, where demand is always on the surge, population is the highest and increasing disposable income of the growing middle class, it is an opportunity to make themselves available and tap into an expansive market. If implemented effectively, the CETA offers potential to not only give impetus, but also effect an overhaul as well as transform sectors like textiles, pharma, IT and services while enhancing India’s cultural and human capital partnership with the UK. It sends a conspicuous message to a polarised and faction-driven world that India stands tall and unshaken, marching towards economic excellence.
Beyond trade flows, CETA carries strategic significance. It reflects a conscious effort by both countries to redefine their economic relationship in contemporary terms, disentangled from historical legacies. However, the agreement’s success will hinge less on headline tariff reductions and more on implementation capacity—particularly rules of origin compliance, regulatory coordination, and the ability of Indian MSMEs to meaningfully utilise preferential access. Without targeted domestic facilitation, utilisation rates risk remaining modest.
INDIA – EFTA: Investment Centred Trade Engagement
Equally significant was the India- European Free Trade Association(EFTA) Trade and Economic Partnership Agreement (TEPA) entered into in October. Entered into during the Prosperity Summit 2025, the TEPA committed USD 100 billion in investments and 1 million direct jobs over a period of 15 years, the first binding pledge of its kind in any Indian FTA(PIB India-EFTA Trade, 2025). Represented by delegates from Switzerland, Norway, Iceland and Liechtenstein for EFTA, the agreement not only reduces tariffs but also emphasises on investment facilitation and economic cooperation. Notably, there is an investment facilitation mechanism to monitor implementation and progress, thereby placing importance on effective implementation.
A defining moment in India–Europe economic relations, the FTA represents a confluence of India’s self-sufficient vision and EFTA’s resilient, diversified partnerships(PIB India-EFTA Trade, 2025). For a country like India, whose population significantly consists of a younger population, this stimulates job opportunities by providing a gateway for skilled talent and services.
India – EU: Persistent Structural Divergencies
In terms of its relationship with the West, the India- EU bilateral Trade deal has been pending successful agreements since its relaunch in 2022(Kumar & Acharya, 2025), contrary to the successful outcomes with the UK and the EFTA. Although the push for an expeditious result comes from Mr Trump’s exorbitant tariff hikes, key areas of the agreement remain under strong negotiations. While possessing the potential to lift an existing USD 139.75 billion India-EU trade, the talks reflect differences in expectations and advantages from both sides(Kumar & Acharya, 2025).
It is pertinent to note that the talks expose sharp differences on multiple fronts. The primary contention pivots on the EU’s proposed carbon border adjustment measures. India insists on preserving differential WTO rules for developing countries, rejecting the EU’s planned carbon border taxes on steel, aluminium and cement (Reuters, 2025). Additionally, disagreements over automobile tariffs, data regulation, and governance, as well as regulatory harmonisation, continue to impede agreement.
While the economic potential of an India–EU FTA remains considerable, progress appears constrained by structural incompatibilities rather than negotiating inertia.
Fostering Bilateral Relations
This year witnessed major developments in negotiations across FTAs with its evolving and established partners(PIB Year End, 2025). Notably, negotiations with Israel, pending since 2010, were revived and gained significant momentum in November 2025, thus making significant progress in the WANA region(PIB Year End, 2025).
It is to be noted that India’s trade negotiations and commitments are not restricted to the abovementioned. Across regions, countries have either advanced formal negotiations or expressed keen interest in redefining relations. Qatar, Saudi Arabia and other Middle East countries have either expressed keen interest or initiated positive preliminary processes to foster and cement trade relations with India(PIB Year End, 2025). This reflects India’s shift to prioritising bilateral relations and strengthening cultural, economic, and social ties on an intimate level with the Middle East.
Portraying itself as the leader of the Global South, India has held a plethora of trade deliberations with African nations while furthering advanced negotiations with Chile, Peru, Sri Lanka and the Maldives (PIB Year End, 2025), thereby restructuring geopolitical relations with reduced dependence on the West and shared cultural as well as economic experiences.
Notable progress was witnessed in negotiations with Australia’s CECA, building on the existing Economic Cooperation and Trade Agreement (ECTA)(Hindu, 2025). The negotiations covered a wide range of areas, including goods, services and mobility among other provisions(Hindu, 2025). However, the FTA is pending finality with intense negotiations underway.
In addition to such active engagements, the relaunch of trade talks with New Zealand is reflective of renewed intent on both sides to deepen and strengthen bilateral economic ties while facilitating access to expanding markets as well as emerging commercial opportunities.
Conclusion
The unprecedented agreements negotiations advanced by India are a strong testament to its commitment towards strengthening bilateral trades while recalibrating its engagement in an increasingly polarised and fragmented global order. Reimaging and restoring direct, partner-specific economic ties, India has sought to reinforce coordination and cooperation beyond trade. Moreover, as it positions itself to be the pioneer and voice of the Global South, such bilateral treaties deepen ties which further cooperation, coordination, and collaboration in multilateral fora. Set within India’s civilisational ethos yet engaging with contemporary economic realities, these agreements project India as a modern, futuristic, and dependable trade ally.
In terms of progress, negotiations with Australia, Israel and several member states of the Global South reflect promising outcomes and strong commitments to shared values and mutual economic interests. Specifically with Australia, given that the current negotiations are in addition to the 2022 agreement, the talks lend credence to the long-standing diplomatic and political engagements, transcending mere economic interests.
However, India may have faced major setbacks in terms of its talks with the EU and the USA. With the EU, the trade negotiations seemed to have stalled and no longer reflect optimistic results. A major reason for the same pertains to issues related to the automobile and steel sector, while India’s demand for ease on carbon taxes(Srivastava & Valero, 2025). Even with the USA, tariff impositions by the Trump administration have adversely impacted the bilateral negotiations underway between the two countries, thus stalling the talks.
Thus, while 2025 underscores India’s calibrated yet ambitious FTA strategy, defined by landmark, historical and unprecedented relationships, it has also tripped over persistent negotiation hurdles. While achievements filling its quiver reinforce India’s economic credibility, stalled negotiations with significant partners highlight the need for strategic flexibility, domestic preparedness, and sustained diplomatic engagement.
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