New Delhi appears to be charting a course away from broad, continental free trade agreements (FTAs) with African nations, instead favouring deeper engagements with established customs unions. Officials indicate a pivot towards entities like the Southern African Customs Union (SACU), encompassing Botswana, Eswatini, Lesotho, Namibia, and South Africa. This move signals a preference for more structured economic blocs that allow for unimpeded movement of goods within their member states.
The shift signals a strategic re-evaluation of India's approach to trade pacts, moving from widespread FTA negotiations to a more focused strategy on customs unions. Discussions with African counterparts have intensified recently, with engagements planned to extend beyond trade, touching upon business, culture, security, and defence. These deeper ties are expected to be cemented during an upcoming summit scheduled from May 28 to May 31, which will include separate sessions for Foreign Ministers and a leaders' summit.
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Reassessing FTA Strategies Amid Global Uncertainty
This recalibration follows a period where India has been reassessing its trade pact strategies. As far back as October 2024, there were reports of a temporary pause on fresh FTA negotiations as the country aimed to refine its approach, emphasizing deals that better protect national interests and incorporate careful consideration of future risks.
Recent activity indicates a broader trend in India's trade policy. In October 2025, India saw the India-EFTA FTA take effect, facilitating tariff reductions and investment commitments with Switzerland, Norway, Iceland, and Liechtenstein. Concurrently, negotiations have been ongoing with other major economies, including the United Kingdom, European Union, United States, Peru, and Chile. India has also been enhancing maritime trade routes, with agreements like the one with the UAE impacting key sectors such as IT services, pharmaceuticals, textiles, energy, and machinery.
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Complexities of Free Trade Agreements
The emphasis on FTAs has been a consistent theme for India, seeking to boost exports, attract foreign investment, and integrate into global value chains. However, the country has also experienced widening trade deficits with certain FTA partners, such as those within ASEAN and South Korea. This has led to a more nuanced approach, with newer agreements increasingly incorporating elements beyond just tariffs.
Recent pacts have begun to embed binding investment commitments, social security arrangements, and gradual opening of government procurement markets. This evolution reflects a strategic move, particularly in negotiations with developed nations like the UK, Australia, New Zealand, and the EU, where tariff concessions might offer limited market access. The focus has broadened to include investment ties, visa commitments, and calibrated access to government markets.
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The global trade landscape remains complex, with factors such as rising protectionism in advanced economies, slowing global demand, and new climate-linked trade barriers posing challenges. Experts suggest that India's export growth will depend on improving product quality, moving up the value chain, and reducing costs, especially as major markets like the US continue to employ unilateral tariffs. This backdrop underscores India's need for robust and strategically beneficial trade agreements.
