India Is Building a Trade Web No Single Partner Can Hold Hostage

In the same July week, Indian officials sat down in Brussels to implement a free-trade agreement with the European Union, continued negotiating a critical-minerals deal with Russia, and absorbed the latest Section 301 "excess capacity" probes from Washington — the same punitive trade tool the United States uses against China. None of these moves was a response to the others. Together they describe something larger: India is building a trade architecture designed so that no single partner can hold it hostage. Commerce Minister Piyush Goyal laid out the endgame.

Two more to go, very soon in the next few months with the EU and the US, and we would have nine FTAs with 38 advanced economies together, opening doors to nearly two-thirds of global trade, nearly 65–70 percent of global GDP — Piyush Goyal

Indian officials describe the ambition in global terms: the intent is to cover the entire world, and the political commitment exists to reduce the disadvantages Indian exporters face ^[1]. The trade web is already taking material form. The EU FTA, concluded in early July and implemented at the Brussels summit this week, pairs market access with maritime security cooperation and the India-Middle East-Europe Economic Corridor — infrastructure that connects India to Europe through the Middle East ^[2]. The UK Comprehensive Economic and Trade Agreement entered force on July 15, granting duty-free access to 99% of Indian exports ^[3]. The New Zealand FTA, signed in April, commits Wellington to promote $20 billion in investment into India over 15 to 25 years and provides 100% duty-free access for all Indian exports, while India carefully excluded dairy, sugar, and edible oils to protect its farmers ^[4]. EU negotiators explicitly rejected the idea that their deal was driven by Trump's trade policies, pointing instead to pandemic-era supply-chain disruptions and the Ukraine war.

We did not conclude this agreement because of a tweet. We concluded this agreement because there is a genuine and strategic and economic interest for the EU and India to come closer. — European Union

The motivation may differ by partner, but the pattern is the same: India is signing agreements in every direction. The same logic governs critical minerals. India has built partnerships with 24 countries and is negotiating with 11 more, spanning North America, Europe, Africa, West Asia, Central Asia, Southeast Asia, and Australia ^[5]. In May, it signed a bilateral critical-minerals pact with the United States — Marco Rubio framed it as a way to avoid single-source monopolies ^[6] — while simultaneously negotiating a minerals deal with Russia and securing agreements with France and Indonesia ^[7][8]. The same country that partners with Washington on minerals is also talking to Moscow about them. That is not contradiction; it is the point. Energy tells the same story. India has expanded its crude-oil sourcing from 20 countries to 41 over eight years, trimming long-term Middle Eastern contracts in favor of spot-market purchases from the United States, Brazil, Guyana, and Russia ^[9]. During the Hormuz crisis, it nearly doubled Russian oil imports to 1.98 million barrels per day using a temporary Trump administration sanction waiver, while also increasing imports from Angola, Iran, and Venezuela ^[10]. The diversification works — but it also reveals a dependency of its own: even India's hedging strategy runs partly on American sanction decisions. The web, then, is real. But it does not resolve the central tension of Indian trade policy: the United States remains indispensable even as it becomes unreliable. On one side of the ledger, the deepening is unmistakable. India and the US are finalizing a bilateral trade deal that is roughly 98% complete, targeting $500 billion in bilateral trade by 2030 ^[11]. Indian companies plan to invest over $20.5 billion in the US across technology and pharmaceuticals ^[12]. Indian Ambassador Vinay Mohan Kwatra calls the US an indispensable anchor while outlining India's path from a $4.3 trillion economy to $25-30 trillion by 2047 ^[13]. On the other side, the fraying is equally real. The US is conducting Section 301 investigations into India's alleged excess capacity in solar modules, petrochemicals, and steel — the same punitive trade tool Washington uses against China — with the US Trade Representative citing Indian solar-module manufacturing capacity as nearly triple annual domestic demand ^[12]. A trust deficit has opened. Former Deputy Secretary of State Kurt Campbell did not mince words.

This has caused a deep hurt… a deep, profound hurt among Indian friends. — Kurt M. Campbell

^[14] At the WTO's ministerial conference in March, the US declared the global trade order untenable and unsustainable while India and China found themselves on the same side, defending the most-favored-nation principle ^[15]. The SBI research arm captured the dynamic with unusual directness.

The short-run payoff is leverage. The long-run cost is trust depreciation with the US. — SBI PO Exam

Its recommendation was to test the resolve of the US administration and wear down the opening position, not the relationship ^[16]. And then there is China. For all the diversification, China surpassed the United States as India's largest trading partner in the last fiscal year, with $151.1 billion in bilateral trade. But the asymmetry is stark: India imported $131.63 billion from China while exporting only $19.47 billion, producing a record $112.6 billion trade deficit ^[17]. In March, an Indian business delegation visited China for the first time since the 2020 Ladakh standoff, focused on renewable energy, electric vehicles, IT, and infrastructure ^[18]. The web spreads in every direction, but the gravitational pull of the Chinese economy is growing, not shrinking. The strategy is showing returns. India's total exports hit a record $863 billion in the last fiscal year, nearly double the $441 billion of a decade ago ^[19]. But the binding constraint on India's export ambitions is not market access. It is what happens inside the country. Yes Securities put the finding plainly.

The strongest counterargument is that India's primary challenge lies not in market access but in domestic competitiveness. — YES Securities (India) Limited

^[20] High logistics costs, expensive power, and low labor productivity are the real brakes on Indian export growth, and no free-trade agreement — however landmark — can sign them away. The UK steel dispute is the miniature proof. The ink was barely dry on the Comprehensive Economic and Trade Agreement — implemented July 15, hailed as one of India's most ambitious FTAs — when a steel trade dispute erupted. UK safeguard measures cut tariff-free steel quotas by 60%, threatening Indian steel exports ^[21]. India threatened to revoke whisky tariff concessions and take a more drastic step.

We have to rebalance the FTA — Government of India

^[22] You sign the landmark deal, and within days the partner erects a barrier. The architecture is necessary. It is not sufficient. The web can open doors; it cannot make Indian industry fit to walk through them.