Trade Agreements: The Country’s Export Strategy Is Coming of Age

At a time when the global economy is grappling with geopolitical tensions, protectionism and supply-chain disruptions, India has chosen deeper integration with the world through a new generation of Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs). Under the leadership of commerce and industry minister Piyush Goyal, India has pursued one of the most ambitious trade negotiating agendas in its history, concluding some of the fastest and most comprehensive pacts ever signed by the country, delivering significant gains for industry, exporters, micro, small and medium enterprises, and also Indian consumers.

The economic rationale is compelling. FTAs are no longer merely tariff-reduction instruments; they are platforms for integrating Indian businesses into trusted global supply chains, attracting investment, promoting technology transfers, facilitating services exports and creating high-quality jobs. By securing preferential access to major economies, such agreements extend the reach of ‘Make in India’ beyond national borders, allowing India-based producers to serve a significantly larger global consumer base. This adds to the investment attractiveness of India, both for domestic and international investors.

The early outcomes have been impressive. The India-UAE CEPA, signed in 2022, aimed at increasing bilateral trade to $100 billion over 5 years. The goal was achieved in 2024-25.

The India-Australia Economic Cooperation and Trade Agreement (ECTA), India’s first trade pact with a developed economy in over a decade, has produced similarly encouraging results. India’s exports to Australia grew by 8% in 2024-25, with gains spread across manufacturing, pharmaceuticals, chemicals, textiles, agriculture and gems and jewellery. This deal provides Indian exporters with preferential access across virtually all Australian tariff lines, offering a huge opportunity for Indian industry, especially in labour-intensive sectors.

The opportunities ahead are even more substantial. The India-UK CETA grants duty-free access to nearly 99% of Indian exports to the UK market and aims to double India-UK trade by 2030. Beyond merchandise trade, the agreement marks a breakthrough for India’s services economy. In a first-of-its-kind arrangement by the UK, the deal facilitates the mobility of Indian professionals across sectors such as IT, healthcare, finance and education, while an accompanying social security agreement is expected to generate savings of over ₹4,000 crore for Indian professionals and businesses operating in the UK, significantly enhancing their global competitiveness.

The India–EU FTA represents an even larger strategic breakthrough. Together, India and the EU account for roughly a quarter of global GDP and one-third of global trade. Once implemented, the agreement will provide preferential access for more than 99% of Indian exports by value, creating an opportunity to strengthen ‘Make in India’ and boost labour-intensive sectors. It is also expected to provide a major fillip to India’s agricultural and processed food exports, expanding opportunities for farmers and agri-enterprises, while opening unprecedented access for Indian service providers across 144 sub-sectors, including IT, consulting, education and other professional services.

Negotiations are advancing with several strategically important partners, including the US, Canada, Mexico, Chile, the Eurasian Economic Union (EAEU), Mercosur and others. Clearly, India continues to expand its network of trade partnerships. Simultaneously, discussions are underway to review and upgrade existing agreements with Asean and South Korea to better reflect contemporary supply chains, improve utilization and deliver better balanced outcomes for Indian industry.

An important feature of India’s new-generation FTAs is that these are not solely about exports, but also focus on attracting investment, technology and innovation. The India-EFTA Trade and Economic Partnership Agreement includes a landmark commitment to facilitate $100 billion in investment over 15 years and create one million direct jobs. New Zealand has committed to facilitating $20 billion in investment, while UAE investments continue to expand across logistics, infrastructure and food processing. These developments strengthen India’s manufacturing ecosystem while creating opportunities for domestic firms to plug into global production networks.

Going forward, industry needs to take the baton forward and focus on utilization. Investing in FTA readiness by building internal capabilities to understand rules of origin, certification requirements and tariff schedules is important. Emphasis should be placed not just on raising India’s export volumes, but also on boosting higher value-added exports to gain a greater share of global supply chains. Aligning with global standards for enhanced competitiveness is equally important. New agreements cover issues of sustainability, digital trade, traceability and regulatory compliance. Firms that align early with evolving standards will gain a durable competitive advantage.

Trade deals offer opportunities for partnerships with global investors entering through myriad agreements that would provide access to technology and global distribution networks, and in the process help build domestic capabilities.

Most importantly, long-term competitiveness will depend on innovation, product differentiation and technology adoption, rather than tariff advantages alone. For this, Indian industry should step up R&D and technology development.

India’s trade strategy offers Indian industry immense opportunities for growth and global expansion. The country has secured unprecedented access to some of the world’s largest and wealthiest markets. The task now is to maximize utilization and transform market access into market power through competitiveness, innovation and global partnerships. Though India has the advantage of a large domestic market, its ambition to become a global manufacturing hub and deliver double-digit economic growth necessitates access to overseas markets. Our FTA strategy is delivering on this, steadily and strongly.

Note: this article was first published in  The Mint