More Stories

Informist, Thursday, May 29, 2025

--RBI: Ongoing trade pact talks with many nations may aid greater trade share 

NEW DELHI – India's existing free trade agreements, preferential trade agreements and the new trade deals that are currently under negotiation, may support growth in trade as exports are seen facing headwinds, the Reserve Bank of India said Thursday. India's exports face risks from rising geopolitical tensions, inward-looking policies and risk of potential tariff war among major economies, the central bank said in its Annual Report for 2024-25 (Apr-Mar).

India is currently negotiating trade agreements with the US, Oman, Peru, and the European Union.

Tariff related concerns stem from US President Donald Trump's sweeping reciprocal tariffs, including those on India, which led to other nations retaliating with more tariffs or being in the process of doing so. A trade agreement is New Delhi's hope to avoid Washington's proposed reciprocal tariffs of 26% on Indian goods, likely to be effected in July. The reciprocal duty by Washington could significantly affect India's exports growth as the US is the top destination for Indian exporters. India exported goods worth $86.51 billion to US in FY25, up 11.6% on year. 

According to the central bank, trade agreement negotiations with several trade partners may facilitate India's greater participation in global trade. The expansion of key export sectors including electronics, pharmaceuticals, engineering goods and agriculture, coupled with innovations in e-commerce and digital trade, would benefit India's export growth, it added. India's total exports in FY25 were to the tune of $437.51 billion, almost flat on year. Imports during the same time were up 6.4% on year at $721.32 billion. 

The central bank Thursday also said that in-house study shows outward foreign direct investment from India is strongly impacted by exports to that particular country, "indicating that robust bilateral trade relations strengthen economic linkages and foster investment". Besides, India's outward foreign direct investment is positively impacted by the host country's nominal GDP, emphasising the significance of market size, the RBI added.  End

US$1 = INR 85.51

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.