Energy Security and Russia Partnership
The U.S. had demanded that India stop buying discounted Russian oil. India firmly rejected this pressure, saying that energy security comes first for Indian citizens and industry. As a result, India has continued to import Russian crude oil at favorable prices while also deepening its overall economic ties with Moscow.
China Relations Show Pragmatic Rapprochement
On August 31, 2025, Prime Minister Narendra Modi met Chinese President Xi Jinping. This marks a fresh start in India-China relations, which had been strained since the 2020 border clash. The talks signal a more pragmatic and cooperative approach.
Big Trade Deal with UK
India signed a historic Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom on July 24, 2025. The deal removes tariffs on 99% of Indian exports to the UK, giving Indian businesses and exporters greater access to the British market.
Closer Ties with European Union
Negotiations for a Free Trade Agreement (FTA) between India and the European Union have made major progress. The final agreement is expected by the end of 2025. In 2023-24, the EU remained India’s largest trading partner for goods, with a total trade value of $137.41 billion.
Partnership with Japan for Investments and People Exchange
India and Japan agreed to raise Japanese private investment in India to $6.8 billion annually. Both countries also decided to increase people-to-people ties, aiming to exchange half a million students and workers in the next five years.
South America: Brazil and Argentina
India’s trade with Brazil reached $12 billion in 2024. Both sides aim to raise this number to more than $20 billion by 2030. India’s trade with Argentina was $5.2 billion in 2024 and is showing strong growth during 2025.
Manufacturing Expansion in Africa
Many Indian companies are expanding operations in Africa to avoid U.S. tariffs. For example, garment makers like Gokaldas Exports have increased production in Kenya and Ethiopia. This allows Indian businesses to benefit from Africa’s trade agreements while diversifying markets.
Canada Trade Growth Despite Diplomatic Tensions
Even with ongoing diplomatic disagreements, India’s trade with Canada grew by 3.2% in 2025, reaching $8.6 billion. This shows continued resilience in economic relations.
India-Switzerland Free Trade Deal Begins October 1, 2025
India and Switzerland will start a Free Trade Agreement under TEPA from October 1, 2025. India will allow duty-free access for 94.7% of Swiss exports, saving about CHF 167 million annually. The agreement also covers trade, investment, job creation, and includes binding sustainability rules.
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