India Keen To Conclude Ongoing Trade Talks To Push Exports

For Indian exporters, uncertainties continue over the future landscape of global trade, even as the Donald Trump administration pressed a 90-day pause button on universal reciprocal tariffs. Experts fear the worst-impacted will be the micro, small, and medium enterprises (MSME) sector, which has been battling a host of challenges, including a liquidity crunch.

Though exports from MSMEs have been rising — it increased from Rs 3.95 lakh crore in 2020-21 to Rs 12.39 lakh crore in 2024-25 — the uncertainties have slowed down their growth. The number of MSMEs exporting merchandise abroad, increased from 52,849 in 2020-21 to 1,73,350 in 2024-25.

“There is a lack of awareness about the ECGC schemes, though what they provide is more or less adequate to cover exporters, including those that can be classified as MSMEs,” an official who was part of a high-level meeting held earlier this week told The Secretariat.

“All these units will be in trouble. The US tariffs will definitely impact their businesses and bottom lines,” he said, explaining that was why the meeting had been called on advice from the central government, which was monitoring efforts to boost trade on an "almost day-to-day basis."

Trump’s recent comment at a news conference at the White House, where he acknowledged that tariffs imposed on China will “come down substantially, but it won’t be zero,” has however, come as a relief to exporters across the world and global trade dynamics. 

India's Trade Pacts

A government source said ongoing trade talks with countries, including the US, will be concluded on time.

Arun Goyal, trade expert and director, Academy of Business Studies said that India should negotiate the trade pacts with deftness. “India needs to know that this is an opportunity and with the US-China ties souring, Washington’s dependence will increase on New Delhi for its strategic location,” Goyal said. He added that India's exports to the US could increase further despite the current uncertainties.

Meanwhile, the proposed free trade agreement (FTA) with the Gulf Cooperation Council (GCC) countries is expected to get a push as well.

Earlier, speaking at the 10th CII India-LAC Conclave, Piyush Goyal, Commerce and Industries Minister, said that talks on a possible FTA with Peru have been ongoing for a prolonged period of time, and that this has to be corrected. 

The exporters have typically been focusing on a select few markets, the US being the dominant one.

The emphasis now is on tapping markets in Latin America, Australia and New Zealand, and Africa, while maintaining the thrust on existing ones like West Asian economies.

The Australia-India Economic Cooperation and Trade Agreement (ECTA), which came into force in December 2022, is showing results. India sources several key raw materials from Australia. 

Latin American Push

Latin American markets are seen as offering a significant opportunity for Indian exporters. “Rising geopolitical tensions make India an attractive partner for many countries in Latin America, as it is perceived as independent and largely neutral in the power struggles between the US, China and Russia,” DW News said.  

A government official added that the thrust on Latin America for India is relatively a new development. “There is a huge potential in Latin American countries, including Brazil and Argentina,” the official said.

At present, India’s bilateral trade with Latin American economies stands at around US$ 45 billion, which can be significantly increased. Goyal added that the figure could easily stretch to US$ 200 billion in the coming years.

Exporters have also sought ECGC’s support to expand their businesses in countries that come with added risks, especially related to travel and payment. “The choice of countries needs to be carefully charted with a full analysis of their risks and strengths,” the official added. 

That apart, several countries are now looking at a China Plus strategy, which could push India's cause and boost exports, officials said.