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India has recently entered into a free-trade agreement (FTA) with New Zealand in a record nine months, which New Delhi considers as part of its strategy to move away from the US and to diversify its export markets. According to the South China Morning Post, this agreement indicates India’s intention to gradually cut down the US dependence and build up the trade relations with other countries, a strategy that is likely to be hastened in the near future.

This tactic became more compelling after former US President Donald Trump last year imposed heavy import tariffs on Indian products of up to 50 percent.

India has been very clear in its response to these tariffs - it has safeguarded certain sensitive sectors while at the same time being open to talks.

The New Zealand agreement is not a stand-alone initiative; it is the third significant FTA in quick succession, coming after the UK and Oman deals, thereby enforcing India’s desire to enlarge its trading network across the globe and not to be overly reliant on one major market.

The US is still India's top export market, taking about 18 percent of total exports of goods, which include fabrics, leather, and other consumer goods.

The US demand is also significantly influenced by the massive Indian diaspora living there. Nevertheless, to weigh the US trade policy risks, India, particularly the 50 per cent tariffs that have been cumulative since August 2025, has decided to look for other markets.

Though demanding a comprehensive trade agreement with the US, India is still very careful when it comes to particularly sensitive areas such as agriculture and dairy, which hold great economic and political importance for the country.

The complexity of the situation increases along with India’s crude oil acquisitions from Russia, which US President Donald Trump has criticized time and again. He has predicted a higher tariff for India because of its oil importations from Russia below the market rate, which the US interprets as a support for Russia's war activities in Ukraine.

Nevertheless, India has made its stance very clear on the matter and continues trading while both countries are in the process of negotiations to find a trade agreement that is acceptable to both of them.

To reduce market dependency on the US alone, India is now actively shuffling its trade risks through the signing of FTAs with various countries which is likely to result in a more balanced and resistant export structure.

The Secretary of Commerce Rajesh Agrawal has pointed out that the diversification initiatives are already producing good results with the export momentum getting strong and strengthening even more.

Export performance of India has been very strong despite global difficulties. In the financial year 2024–25, exports totalled a record US$825.25 billion, thereby showing the power of uncertainty.

During the first eight months of the current financial year, the country's exports showed an increase of 5.43 per cent, amounting to US$562.13 billion. This proved that India's diversification strategy is a successful one since it could sustain export growth despite the geopolitical tensions that keep causing volatility.

India's entire strategy consists of the following: conserving very sensitive domestic sectors, dealing with major global partners, and trading to reduce the US involvement.

Negatively, the country is dealing with geopolitical risks that include accusations over the Indian purchase of Russian oil; positively, it is strengthening trade relationships with countries like New Zealand, the UK, and Oman.

This comprehensive method is aimed at not only keeping the export path but also protecting the economic interests and making trade resilience of India in the long run.