The coming months are set to see India significantly ramp up efforts to bolster its status as a major global exporter of goods through more free trade agreements (FTAs) and other preferential arrangements.
In particular, the country may be looking to the west for new opportunities. With the US especially keen to diversify its supply chain to become less reliant on China, the UK seeking new deals post-Brexit and the EU offering great potential if current barriers to trade can be lifted, it's set to be a busy few months and years ahead for the nation.
So what are New Delhi's priorities set to be going into 2023 and beyond, and what could it mean for global trade?
A change of priorities
The current push to engage on bilateral and multilateral deals marks a significant change in attitude for the Indian government, which has traditionally been unwilling to sign comprehensive FTAs, and also withdrawing from the Regional Comprehensive Economic Partnership (RCEP) in 2019.
However, this protectionist approach has changed rapidly. The country had previously set an ambitious target of increasing annual goods exports to $400 billion, which was successfully reached in March 2022.
According to the World Economic Forum, reasons for this include a desire to safeguard supply chains, enhance exports and ensure the country is able to compete internationally by aligning on global standards in finance, clean energy, digital trade and supply chains.
This has resulted in a significant uptick in both signed deals in in-progress negotiations. As well as completed agreements with Australia and the UAE, the country is currently in active dialogues with the UK, Canada, Israel, and the EU.
No deal with the US on the horizon
One major goal in the long term may be an expanded trading relationship with the SU. However, a full FTA appears to be still a long way off, as such agreements are not seen as a priority for Washington.
Indeed, trade minister Piyush Goyal told reporters after a recent India-US Trade Policy Forum meeting with US Trade Representative Katherine Tai that a US-India FTA is "not on the table" for now.
However, he added: "Rather than that, we are focusing on greater market access. We are focusing on ease of doing business between the two countries, you're looking at, bilaterally, a much larger footprint between the two countries, for trade, investment and business."
Indeed, one outcome of the forum was the formation of a new working group to build sustainable supply chains and boost bilateral trade. This will initially focus on issues including trade facilitation, digitization of customs procedures and clean technologies.
Progress to be made on European agreements?
Elsewhere, talks with the EU are continuing to gather pace, with a third round of discussions taking place towards the end of 2022. Speaking prior to this, Germany's ambassador to India Dr Phillip Ackermann expressed optimism for progress, noting that Berlin is particularly keen on an FTA with India. However, he warned that there is still a long road ahead.
"Every FTA is complicated," Dr Ackermann said. "And India is big and a very self-confident partner so I foresee a lot of rounds to come. Whether we'll be ready by the end of 2023, maybe not. But I think it's good to have ambitious goals."
Among the major issues that will need to be resolved are import quotas and tariffs on steel imports to the EU. An official with knowledge of the talks recently told Reuters that this is set to be a key priority for New Delhi, as it has been raised as a concern by manufacturers in the nation's steel sector.
Other potential barriers include the EU's proposed carbon dioxide emissions tariff for imports of polluting goods such as cement. India may seek clarification or exemptions from this, but the EU is likely to be firm in enforcing its strict standards to protect its own industries.
Meanwhile, the UK is still hoping to strike its own FTA with India, after an initial deadline to finalize an agreement by Diwali 2022 was missed. In a recent interview with the Times, international trade secretary Kemi Badenoch expressed hope that a deal can be clinched this year, but ruled out making similar concessions on Visa restrictions to those included in the UK-Australia deal.
"We have to make sure that each trade agreement we sign is tailored to the specific country," Ms Badenoch said. "The kind of mobility offer I can do to a country like Australia is not going to be the same kind of mobility offer I can do with a country like India."