The world of international trade policy and market agreements saw significant movement this week (October 19–25, 2025), primarily centered on escalating US-China trade tensions and India’s proactive diplomacy in finalizing crucial Free Trade Agreements (FTAs). For exporters and importers, these developments underscore a rapidly changing global market where geopolitical factors are directly influencing supply chains, tariffs, and market access.
The New Chapter in the US-China Trade Conflict
The trade relationship between the world’s two largest economies took a critical turn this week, moving back into a high-tension phase reminiscent of earlier trade war chapters. The major news was the start of a fresh round of high-level trade talks in Kuala Lumpur, Malaysia, on Saturday, October 25, just as new tariff threats loomed. Chinese Vice Premier He Lifeng led the delegation to meet with US officials in an attempt to de-escalate the dispute.
Adding to the pressure, the US Office of the Trade Representative (USTR) announced on Friday, October 24, a formal investigation under Section 301 of the Trade Act of 1974 into China’s compliance with the 2020 Phase One trade deal. This investigation, which includes a scheduled public hearing, focuses on Beijing’s failure to meet its commitments to purchase more US goods. The announcement coincided with US President Donald Trump’s departure for an Asia trip, which includes a highly anticipated meeting with Chinese President Xi Jinping in South Korea on October 30.
The immediate trigger for the renewed tension was China’s introduction of sweeping export controls on its rare earth minerals earlier in the month, a strategic move that affects industries from high-tech manufacturing to defense. In response, President Trump has threatened to impose an additional 100% tariff on Chinese imports from November 1, which would bring the total effective duty on some goods to a staggering 155%. Analysts are closely watching the upcoming leaders’ summit, as a failure to find common ground could severely impact global supply chains and further dampen the 2026 global trade outlook, which the WTO has already downgraded.
India’s Strategic Push on Trade Agreements
India, a rising power in the global trade arena, saw crucial progress on multiple bilateral trade agreements, reinforcing its strategy of diversifying export markets and integrating with developed economies.
Momentum in India-US Trade Deal
Reports this week indicated that India and the US are in an “extensive and advanced stage” of negotiations for a trade deal that could be a significant win for Indian exporters. Market sentiment responded positively, with shares of Indian exporters in sectors like Information Technology (IT) and textiles experiencing a relief rally.
Key aspects of the reported discussions include:
- Tariff Reduction: A potential agreement could see US tariffs on Indian exports drop significantly from the current penal levy of 50% down to a range of 15% to 16%. This current high tariff includes a 25% reciprocal duty and an additional 25% penal tariff imposed due to India’s continued imports of discounted Russian crude oil.
- Concessions and Trade-Offs: India is reportedly considering a gradual reduction in Russian oil imports and permitting more non-genetically modified (GM) American corn and soymeal into its markets. In return, the US is expected to provide concessions on energy trade and potentially oil at more competitive prices.
- Upcoming Meeting: The trade deal could potentially be announced at a bilateral meeting between Prime Minister Narendra Modi and US President Donald Trump, likely on the sidelines of the ASEAN Summit. Commerce and Industry Minister Piyush Goyal expressed optimism, stating he expects to clinch a “fair and equitable” agreement in the near future.
Update on Other Key FTAs
Beyond the US talks, India is maintaining a swift pace in its wider trade agenda:
- India-EFTA (TEPA): The Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland) is officially in force since October 1, 2025. This landmark deal is India’s first with four developed European nations, includes a binding commitment of $100 billion in investments and the creation of one million direct jobs over 15 years, and offers major market access for Indian goods like machinery, textiles, and processed foods.
- India-New Zealand FTA: The next round of in-person negotiations for the proposed Free Trade Agreement is scheduled to be held in New Delhi, continuing the momentum from the third round concluded in September 2025.
- India-UK CETA: The Comprehensive Economic and Trade Agreement (CETA) has been signed and is currently awaiting ratification in the British Parliament. Leaders from both nations expressed satisfaction and looked forward to its early ratification to unlock benefits.
These movements highlight India’s resolve to integrate its economy with key global markets through strategic, mutually beneficial agreements, a critical factor for the long-term growth of platforms like The Exporter Hub.
Source Link : India-UK Joint Statement (October 09, 2025) – Ministry of External Affairs
Add a Comment