NAFTA (North American Free Trade Agreement): In a bid to strike an early trade deal with the US and potentially sidestep the 26% reciprocal tariffs, the Ministry of Commerce and Industry has expanded its NAFTA division, which handles India’s trade with the United States, Canada, and Mexico.

• This comes amid concerns that selective concessions to competing countries like Vietnam and Cambodia may affect India's competitiveness.
• About: Foreign Trade (NAFTA) Division deals with India’s bilateral trade with the United States, Canada, and Mexico.

o These three countries are part of the North American Free Trade Agreement (NAFTA), which was signed in 1994.

oThe region is one of the largest and most important trading blocs globally.

o Since July 2020, NAFTA has been renamed as the USMCA (United States-Mexico-Canada Agreement).

• About: Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the US and each of their trading partners.