India signs deal with Oman as it tries to counter US tariffs by accelerating free trade agreements

NEW DELHI — India signed a comprehensive economic partnership agreement with Oman on Thursday as part of its broader strategy to offset the impact of steep U.S. import tariffs and widen export destinations during growing global trade uncertainties.

This is the second free trade agreement signed by New Delhi in the past six months, the first one being inked with the United Kingdom in May.

The India-Oman agreement was signed in Muscat in the presence of Indian Prime Minister Narendra Modi and Oman's head of state, Sultan Haitham bin Tarik.

The deal aims to boost bilateral trade and push India's exports of engineering goods, textiles, leather, pharmaceuticals and agricultural products. It will provide Indian goods zero-duty market access on 98.08% of Oman's tariff lines, India's Trade Ministry said in a statement.

India has offered Oman tariff liberalization on 77.79% of its tariff lines, which will cover nearly 95% of New Delhi's imports from Muscat, the ministry said.

In recent months, India has accelerated a push to finalize several free trade agreements, or FTAs. The country is in advanced talks with the European Union, New Zealand and Chile, among other countries.

FTAs are a central pillar of India's economic strategy as it seeks deeper integration into global supply chains, stronger export growth and sustained job creation. By lowering tariffs and setting predictable trade rules, the pacts would help Indian businesses remain competitive and expand access to newer markets.

The stepped-up negotiations come as Indian exporters face pressure from higher U.S. import tariffs of 50%, which went into effect in August. While the two countries have been negotiating a bilateral trade agreement, the tariffs have weighed on sectors such as textiles, auto components, metals and labor-intensive manufacturing.

''India is clearly using FTAs as a strategic tool to diversify export markets and soften the impact of steep and uncertain U.S. tariffs,'' trade analyst Ajay Srivastava said.

In all, India has 15 free trade agreements covering 26 countries and six preferential trade agreements, with another 26 nations while negotiating with more than 50 other partners, Srivastava said.

Once the ongoing talks conclude, India will have trade agreements with virtually all major global economies except China, he said.

India signed comprehensive economic cooperation and trade agreements with the United Arab Emirates and Australia in recent years, lifting bilateral trade with both countries. In May, Britain and India announced that they had agreed on a hard-wrought FTA that will slash tariffs on products including Scotch whisky and English gin shipped to India, and Indian food and spices sent to the U.K.

''India is negotiating several FTAs'' at a time of challenges in global trade, Trade Secretary Rajesh Agarwal told reporters this week. ''I see positive progress on several of these, next year.''

But challenges remain as Indian negotiators face pressure to protect small farmers and domestic industries, even as trading partners push for greater market access.

India and the U.S. hoped to have the first tranche of a bilateral trade agreement by the fall, but it hasn't come through, because ties have been strained following India's unabated purchase of discounted Russian crude oil. Washington says the purchases help fund Moscow's war machine in the ongoing invasion of Ukraine.

In recent weeks, there have been signs of tempers cooling. Modi applauded Trump's peace plan to try to end the Russia-Ukraine war, and the two leaders recently spoke over the phone to discuss mutual interests, including trade.

A team of U.S. negotiators led by Deputy Trade Representative Rick Switzer visited New Delhi last week and held talks with Indian officials. Switzer discussed a India-U.S. economic and technological partnership as well as opportunities to boost two-way trade, India's Foreign Ministry said in a statement.