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Informist, Thursday, Jan. 29, 2026

 

--EconSurvey:Trade negotiations with US expected to conclude during the year 

--EconSurvey: Trade deals with US, others to support export momentum 

 

NEW DELHI – India and the US are expected to conclude the ongoing negotiations for the much-touted bilateral trade agreement during the year, the Economic Survey for 2025-26 (Apr-Mar), tabled by Finance Minister Nirmala Sitharaman in Parliament Thursday, said. This could help reduce uncertainty on the external front, which faces heat from US' steep tariffs, hightened uncertainties and increased trade fragmentation. To be sure, the Survey did not specify what "during the year" denotes – FY26, 2026, or FY27. 

 

The US--India's top export destination--in August imposed 50% tariff on goods imported from India, including a punitive tariff of 25% for New Delhi's continued purchases of crude oil from Russia. India has been batting for the trade agreement to shield its huge exports from the 50% tariff, though the trajectory of India–US trade talks has fluctuated significantly over the past 10 months.

 

"The global economic landscape is becoming increasingly unpredictable, driven by tariff increases, supply chain adjustments, and higher regulatory hurdles," the Economic Survey, authored by a team led by Chief Economic Adviser V. Anantha Nageswaran, said. "For Indian industries, the current wave of US tariff implementations and stricter non-tariff barriers present a significant challenge, particularly for export-oriented sectors," it said. 

 

With energy being a key bone of contention in the India-US trade deal, the Survey said that a notable increase in the diversity of countries from which India imports crude oil has been observed. "In FY26 (Apr-Nov), crude oil imports from Libya, Egypt, Brazil, the US and Brunei increased significantly compared to the same period in FY25, while those from Russia, Saudi Arabia, Iraq and Venezuela declined," it said. 

 

So far, Indian exports to the US have held up despite steep duties, rising 9.8% on year to $65.88 billion in Apr–Dec. But in the absence of a trade deal, India may face duties of up to 500% if the US Congress enacts the bipartisan sanctions bill targeting Russia and its trading partners.

 

As such, India's merchandise exports rose to $330.29 billion during the first nine months of FY26 from $322.41 billion a year ago. India imported goods worth $578.61 billion in Apr-Dec, up from $546.36 billion in the same period last year. Trade deficit during Apr-Dec was $248.32 billion against $223.95 billion a year ago.

 

According to the Survey, to sustain the momentum in India's trade performance amidst global uncertainty, the country is actively pursuing a diversified trade strategy, including diversification of export destinations. "Sustaining export momentum will require diversification towards higher-value, more sophisticated products and new destinations," the Survey suggested.

 

In this, an expanding network of free trade agreements supports India's trade strategy by offering reliable market access amid global trade uncertainty. "These agreements enable export-focused firms to boost production and become more integrated into GVC (global value chain)," it said. "Furthermore, by exposing firms to international competition, FTAs improve export competitiveness, encouraging firms to prioritise productivity and reliability over reliance on access-based benefits."

 

India, on Monday, concluded trade negotiation with the European Union, a large export market. The deal offered to cut tariffs on over 95% of export value for both sides. With these provisions, the India-EU agreement--termed "mother of all deals" by European Commission President Ursula von der Leyen--aims to double bilateral trade by 2032.

 

The Survey also noted that enhancements in export competitiveness increasingly depend on state-level implementation, as states play a vital role in providing the infrastructure, regulatory certainty, and administrative coordination that export-focused firms need.  End

 

US$1 = INR 91.96

 

Reported by Priyasmita Dutta

Edited by Tanima Banerjee

 

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