India should focus on diversifying its trade partners: NITI report-OxBig News Network

India should focus on diversifying its trade partners and becoming integral to larger global supply chains and production networks, the NITI Aayog stated in its latest report which was released on Monday.

The report — the third edition of the ‘Trade Watch Quarterly’ publication for Quarter 3 of the financial year 2025 (October to December) — provides a timely and data-rich analysis of India’s merchandise and services trade, alongside an in-depth exploration of evolving US trade policies and their implications for India.

“Fast-tracking free trade agreements, particularly the India-EU FTA, with a clear, time-bound negotiation roadmap, is essential,” an excerpt from the report read, adding that these agreements should prioritise the reduction of non-tariff barriers and facilitate smoother trade in services, a key strength for India.

The focus of this report has been the United States’ evolving trade policy, notably the introduction of the current US tariff regime since April 2025 till July 10, and its implications for India’s export competitiveness.

Notably, the US implemented a baseline 10 per cent tariff on all imports, alongside higher tariffs on specific trading partners such as China, Canada, Mexico, Vietnam and Thailand.

While India’s average tariff exposure remains moderate, the NITI report suggests that this policy shift presents a unique strategic opportunity for Indian exporters. “Analysis at the HS-2 and HS-4 levels shows India is well-positioned to gain market share in a significant portion of its exports to the US, covering over 61 per cent of trade value in the top 30 HS-2 product categories and 52 per cent in the top 100 HS-4 product categories,” the report stated.

However, to boost merchandise trade, the report suggests India to be part of bigger supply chain and production structure.

“Deeper trade engagement with countries such as Australia, Japan, South Korea, and ASEAN nations can be highly beneficial, especially in sectors where India’s export strengths, such as pharmaceuticals, automobiles, and IT, match their import needs,” the report says.

Additionally, pivoting towards African markets by developing a structured India-Africa trade corridor focused on pharmaceuticals, education services, IT, and cost-effective machinery will tap into the growing demand and expand India’s export footprint into emerging regions.