India Beyond the US: A New Era of Global Partnerships

Volatility in global markets rarely comes from balance sheets alone; more often it results from geopolitics, policy changes and strategic uncertainty. One such problem today is the ongoing tension surrounding trade negotiations between India and the US. While both countries remain committed to reaching a mutually beneficial deal, the possibility of tariff-related disruptions has kept exporters and investors cautious.The United States: India’s largest export anchor

The importance of the United States to the Indian trade ecosystem is undeniable. In FY24-25, the US accounted for almost 20% of India’s total exports, worth $86.5 billion, making it our largest export destination. Key sectors such as technical goods, electronics, pharmaceuticals, gemstones and jewelry, and textiles have built strong demand linkages with the US market over the years.Strategic export diversification

However, what deserves equal attention and appreciation is India’s strategic positioning to reduce over-dependence on any one region. Rather than passively wait for the outcome of US negotiations, India has quietly but aggressively built alternative export corridors through Europe, the Middle East and Oceania, such as Australia, New Zealand and Latin America.

Free Trade Agreement between India and the European Union

Source: MOC&I

The most important step in this direction is the recently concluded Free Trade Agreement with the European Union (EU), often described as the ‘mother of all trade agreements’. The agreement provides for the elimination of tariffs on more than 99% of Indian exports to the EU, currently valued at around US$75.76 billion, while gradually opening up key segments of the Indian market to European Union participants. In the longer term, the aim is to almost double bilateral trade volumes between India and the EU, significantly strengthening economic integration between the two regions. This is a game changer for sectors such as textiles. Historically, India has faced higher tariffs in Europe compared to competitors such as Vietnam and Bangladesh, putting Indian exporters at a price disadvantage. With tariffs coming down, Indian textile companies can compete on an equal footing in what is the world’s second largest export market after the US. Over time, this will significantly reduce the sector’s heavy dependence on US demand.

The electronics sector will benefit just as much from this. Currently, almost 38% of India’s electronics exports are US-bound. The EU, on the other hand, represents a huge electronics market worth $750 billion, while India’s current penetration is still below $100 billion. The FTA opens the door for Indian manufacturers to diversify their revenue streams and scale meaningfully in Europe. Pharmaceuticals, gemstones and jewelry, and tech goods also gain access to a large, high-value consumer base, offering both volume growth and price stability.

Expanding the trading card

Complementing the EU deal is the recently signed trade agreement with the United Kingdom. The UK currently absorbs around 3.5% of India’s exports, but the new framework provides duty-free access to 99% of Indian goods and targets bilateral trade worth $100 billion in the coming years. Once again, the biggest beneficiaries are the same export-heavy sectors that are most exposed to the US market. India has also signed free trade agreements with Oman and New Zealand, which are smaller in scale but strategically important for expanding market presence and building resilient trade networks.

Strengthening the Middle East and Asian corridors

In addition to the signed agreements, negotiations are progressing rapidly with countries such as Australia, Chile, Peru, Korea and the Maldives. The urgency reflects a clear diplomatic and economic intent: India wants diversified trade partnerships before a global protectionist wave strengthens.

Even efforts to rebuild relations with countries like Canada and deeper engagement with the UAE, India’s second-largest trading partner, underscore this broader strategy. India and the UAE aim to double bilateral trade to $200 billion by 2032, further strengthening India’s presence in the Middle East corridor.

Conclusion

From an investor’s lens, it’s not just about trading numbers; it is about risk management at national level. The US will remain a crucial partner for India. There is no realistic scenario in which India breaks away from the US market, nor should it. But what India systematically ensures is that no country has disproportionate influence over its export-driven sectors or the broader economic trajectory. This diversification creates bargaining power, economic stability and long-term growth resilience.

As markets remain sensitive to the headlines surrounding the India-US deal, investors must also recognize the bigger picture quietly unfolding in the background. India is not just responding to trade pressure; it is reshaping its global economic footprint.

(The author is founder and CEO of SAMCO Group)