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India’s approach to free trade agreements is moving into a more implementation-focused phase. After spending the past decade expanding its network of bilateral and regional trade arrangements, the emphasis is increasingly on converting negotiated market access into actual export gains for Indian businesses.
The shift is visible in export performance, the growing use of preferential Certificates of Origin and the expansion in the number of product categories being shipped to countries with which India has trade agreements.
For the government, the objective is no longer simply to negotiate lower tariffs. It is to ensure that Indian exporters, including small businesses and labour-intensive industries, understand the concessions available to them and are able to use them effectively.
The strategy also seeks to balance greater market access with safeguards for sensitive domestic sectors, particularly agriculture and other areas where sudden import competition could affect Indian producers.
India’s experience with agreements such as the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and the India-Australia Economic Cooperation and Trade Agreement (ECTA) is increasingly being used to demonstrate how trade agreements can translate into higher exports, greater product penetration and deeper commercial engagement.
What are FTAs and why do they matter?
A Free Trade Agreement is a pact between two countries or groups of countries that provides preferential access to each other’s markets.
The agreements generally involve the reduction or elimination of customs duties on specified goods. Depending on the agreement, they can also address services, investment, intellectual property, digital trade, government procurement, standards and the movement of professionals.
For an Indian exporter, lower or zero customs duties can make a product more competitive in the destination market.
For example, if an Indian manufacturer has to pay a lower import duty than a competitor from a country without a comparable trade agreement, the Indian product can potentially enter the market at a more competitive price.
However, tariff reduction is only one part of the equation.
Exporters must understand the specific product concessions under each agreement, comply with rules of origin and obtain the necessary documentation to claim preferential treatment.
This is why the government is increasingly concentrating on FTA utilisation rather than simply the number of agreements signed.
The Ministry of Commerce and Industry has described India’s FTA approach as one aimed at expanding market access while ensuring that domestic sensitivities are adequately addressed. India’s current trade architecture includes agreements with several major economies and regional partners, while negotiations and upgrades of existing agreements continue.
India’s exports gain momentum
India’s overall export performance provides the broader backdrop to the FTA push.
According to the figures cited in the trade strategy, combined merchandise and services exports reached a record USD 863.1 billion in FY 2025-26, including merchandise exports of USD 441.8 billion.
The momentum continued into FY 2026-27. Combined exports during April-June 2026 were estimated at USD 232.73 billion, representing an increase of 11.37 per cent over the corresponding period a year earlier.
FTA partner countries account for a significant share of India’s merchandise exports.
The UAE emerged as India’s largest individual FTA export destination in FY 2025-26, with merchandise exports of USD 37.36 billion.
Other important FTA destinations included the United Kingdom, Singapore, Nepal, Australia, Malaysia, Japan and South Korea.
The growing importance of these markets means that the effectiveness of India’s trade agreements has direct implications for the country’s overall export performance.
The government’s latest trade approach is therefore centred on helping businesses identify where tariff concessions exist, determine whether their products qualify and complete the documentation required to access those concessions.
India’s official TradeStat system also now provides detailed trade data by country, commodity and tariff classification, with data available through June 2026.
India-UAE CEPA emerges as an early success story
The India-UAE Comprehensive Economic Partnership Agreement is one of the clearest examples of India’s new FTA strategy.
The agreement was signed on February 18, 2022, and came into force on May 1, 2022.
Negotiations were completed in a record 88 days, making it India’s first full trade agreement in about a decade.
The agreement significantly expanded preferential market access for Indian goods in the UAE.
Under the CEPA, the UAE committed to eliminate tariffs on 97 per cent of tariff lines, covering about 99 per cent of Indian exports to the UAE by value. A substantial share received immediate tariff elimination, while other products were placed on phased schedules.
The trade relationship has subsequently expanded.
India-UAE bilateral trade reached USD 100.06 billion in FY 2024-25, up 19.6 per cent from USD 83.65 billion in FY 2023-24, according to the Ministry of Commerce and Industry.
India’s merchandise exports to the UAE reached USD 37.36 billion in FY 2025-26.
The two countries have set an ambitious target of doubling bilateral trade to USD 200 billion by 2032.
The UAE relationship is important not only because of its scale but also because of the role the country plays as a gateway to the wider Gulf and West Asian markets.
For Indian exporters, the CEPA provides opportunities across several sectors, including engineering products, textiles, pharmaceuticals, food products, gems and jewellery and other manufactured goods.
The agreement has also demonstrated why market access must be accompanied by greater awareness among businesses. Tariff concessions have limited value if exporters do not know that they exist or cannot satisfy the rules required to claim them.
India-Australia ECTA expands opportunities
The India-Australia Economic Cooperation and Trade Agreement represents another important example.
The agreement was signed on April 2, 2022, and came into force on December 29, 2022.
India’s merchandise exports to Australia increased from about USD 4 billion in FY 2020-21 to USD 7.28 billion in FY 2025-26, according to the figures cited in the trade overview.
Bilateral merchandise trade reached USD 24.1 billion in FY 2024-25.
Under the ECTA, Australia provides zero-duty access to Indian exports across 100 per cent of its tariff lines, with 98.3 per cent receiving immediate duty-free access when the agreement took effect. The remaining lines were subject to phased tariff elimination.
The agreement covers opportunities in areas including textiles and apparel, agriculture, leather and footwear, jewellery, machinery, electrical goods, pharmaceuticals and medical devices.
India has also retained safeguards for sensitive sectors, demonstrating the balancing act involved in trade negotiations.
The ECTA is also serving as the foundation for negotiations towards a more comprehensive India-Australia Comprehensive Economic Cooperation Agreement, which is expected to cover a wider range of economic issues, including services, digital trade and other areas of deeper economic integration.
Signing an FTA does not automatically reduce duties for every exporter
One of the most important aspects of India’s FTA strategy is understanding that signing an agreement does not automatically mean that every Indian product qualifies for preferential treatment.
The benefit depends on the specific tariff line and the conditions laid down in the agreement.
A major requirement is compliance with rules of origin.
Rules of origin determine whether a product can be considered sufficiently produced or processed in a particular country to qualify for preferential treatment.
This becomes particularly important where an Indian product contains imported components or raw materials.
Exporters must establish that their goods meet the applicable origin criteria.
A preferential Certificate of Origin is therefore an important document in the process.
The certificate provides evidence that the exported goods meet the origin requirements and are eligible for the preferential tariff treatment negotiated under the agreement.
As India has entered into more trade agreements, the use of such certificates has become an important indicator of whether businesses are actually utilising the negotiated concessions.
Certificates of Origin become a key measure of FTA utilisation
The increased use of preferential Certificates of Origin under newer agreements is being viewed as evidence that exporters are becoming more active in using FTA benefits.
Under the India-European Free Trade Association Trade and Economic Partnership Agreement, 7,885 Certificates of Origin had been recorded after the agreement became operational in October 2025.
Similarly, 783 Certificates of Origin had been issued under the India-Oman CEPA following its implementation in June 2026.
These figures highlight the importance of documentation in converting an FTA from a negotiated document into a practical export tool.
The government has also moved towards digitising the process.
The e-CoO 2.0 system enables digital issuance and verification of Certificates of Origin, reducing paperwork and making it easier for exporters and importing authorities to authenticate documents.
The objective is to make the process faster, more transparent and easier to access.
Trade Connect aims to put FTA information in exporters’ hands
Another challenge has been the information gap.
Large companies with dedicated international trade teams may be able to track tariff concessions, rules of origin and compliance requirements. Smaller exporters often have fewer resources and may struggle to identify which trade agreement offers the best opportunity for their products.
The government has therefore developed platforms such as Trade Connect to help exporters access information on international markets, tariffs and FTA-related opportunities.
The broader objective is to make trade agreements more usable for businesses rather than leaving them as technical documents accessible mainly to trade specialists.
This is particularly important for MSMEs, which form a large part of India’s manufacturing and export ecosystem.
If smaller businesses can identify preferential tariffs, understand documentation requirements and find buyers in partner countries, FTAs can potentially broaden the base of Indian exporters.
More Indian products are entering partner markets
The impact of trade agreements can also be assessed by looking beyond total export values.
One important indicator is the number of tariff lines under which Indian products are exported.
Between the initial period and FY 2025-26, the number of tariff lines exported to the UAE increased from 7,546 to 8,053.
For Australia, the number rose from 5,396 to 5,668.
The increase was particularly notable in Mauritius, where exported tariff lines rose from 3,593 to 4,345.
Oman also recorded an increase, with the number of tariff lines rising from 2,879 in May 2026 to 3,371 in June 2026.
A wider range of tariff lines indicates that Indian exporters are not merely increasing shipments of a small number of established products. They are also beginning to explore additional product categories in FTA partner markets.
This diversification is strategically important because dependence on a narrow export basket can leave exporters vulnerable to changes in commodity prices, demand or regulations.
Labour-intensive sectors could gain significantly
India’s FTA strategy has a particular relevance for labour-intensive industries.
Sectors such as textiles and apparel, leather and footwear, agriculture and processed food, marine products, gems and jewellery, carpets and handicrafts employ large numbers of workers and involve extensive networks of MSMEs and small producers.
Improved access to overseas markets can create opportunities for these sectors to increase production and exports.
Textiles, for example, can benefit from lower tariffs when competing with exporters from countries that already enjoy preferential access.
Similarly, processed food and agricultural products can gain from lower duties, provided exporters meet the relevant sanitary, phytosanitary, quality and origin requirements.
Leather, footwear, handicrafts and carpets can also benefit from improved market access because many of these products are labour-intensive and have established production ecosystems in India.
The challenge is to ensure that smaller producers are able to meet international standards and connect with buyers.
Safeguards remain part of India’s trade strategy
While expanding market access for Indian exporters, India has also sought to protect sensitive domestic sectors.
FTAs involve reciprocal commitments. Greater access for Indian goods in foreign markets is generally accompanied by increased access for foreign products in India.
The government therefore uses exclusion lists, tariff-rate quotas, phased tariff reductions and transition periods for products considered sensitive.
The India-UAE CEPA, for example, excluded 1,157 Indian tariff lines from preferential treatment, including categories such as dairy products, fruits and vegetables, cereals, sugar, tea, coffee and spices.
Similarly, under the India-Australia ECTA, India retained a significant exclusion list covering sensitive products including dairy and several agricultural commodities.
This approach reflects the government’s attempt to balance export opportunities with the interests of domestic producers.
FTAs are increasingly covering services
The FTA strategy is not restricted to merchandise exports.
Services have become one of the strongest components of India’s international trade, with services exports reaching USD 421.3 billion in FY 2025-26.
For a country with a large pool of IT professionals, engineers, healthcare workers, educators and other skilled workers, provisions covering the movement of professionals can be as important as tariff concessions on goods.
Recent agreements have therefore included commitments relating to professional mobility and services.
The India-New Zealand FTA, for example, provides a dedicated pathway for up to 5,000 skilled Indians to stay for up to three years in fields including information technology, engineering, healthcare, education, construction, AYUSH, yoga, culinary arts and music.
The India-EU FTA covers 144 services sub-sectors.
The India-UK Comprehensive Economic and Trade Agreement also includes mobility provisions for professionals in areas such as IT, healthcare, finance and education.
These provisions create opportunities for Indian service providers to access overseas markets while strengthening India’s position as a major services exporter.
FTAs can support MSMEs and smaller exporters
A major test of India’s FTA strategy will be whether the benefits extend beyond large corporations.
India’s export ecosystem includes thousands of MSMEs producing everything from garments and engineering components to processed foods, handicrafts and jewellery.
For such businesses, access to a preferential tariff can make a meaningful difference, but only if they can navigate the technical requirements of international trade.
Awareness, certification, packaging, standards compliance, logistics, finance and access to overseas buyers remain important.
The government’s focus on digital Certificates of Origin, Trade Connect and buyer-seller interactions is therefore aimed at reducing some of these barriers.
Greater participation by smaller businesses would also help diversify India’s export base geographically and across product categories.
From negotiating agreements to measuring outcomes
The central change in India’s FTA approach is the growing focus on utilisation.
Earlier, the success of a trade agreement could largely be discussed in terms of tariff concessions negotiated and the number of products covered.
The newer approach increasingly asks different questions.
Are Indian exporters actually using the preferential tariffs?
How many Certificates of Origin are being issued?
Are more Indian products entering partner markets?
Are exports increasing in sectors where tariffs have been reduced?
Are MSMEs accessing the opportunities?
Are services exporters and professionals benefiting from mobility provisions?
These indicators provide a more practical measure of whether an FTA is delivering economic value.
The rise in tariff lines exported to markets such as the UAE, Australia, Mauritius and Oman, alongside the increased use of Certificates of Origin, suggests that utilisation is becoming more visible.
India’s FTA network continues to expand
India’s trade agreement network is also continuing to evolve.
Around ten trade agreements are currently under discussion or negotiation, including engagements with the Eurasian Economic Union, Peru, Chile, Israel, Canada and Maldives.
At the same time, India is working to upgrade existing agreements, including the India-Korea CEPA and India-Sri Lanka ETCA.
The India-EFTA TEPA has also entered the implementation phase, adding another important agreement involving a developed economic bloc.
The government’s objective is to build a diversified network of trade partnerships rather than relying excessively on a small number of markets.
Diversification can provide exporters with additional destinations and reduce the risks associated with dependence on any single market.
India’s FTA journey is increasingly shifting from the negotiating table to the factory, farm, service provider and export warehouse.
The country has spent years negotiating market access with trading partners. The next stage is to ensure that Indian businesses can translate those concessions into actual orders and sustained exports.
The rise in overall exports, stronger merchandise shipments to FTA partners and greater use of preferential Certificates of Origin point towards growing utilisation.
The India-UAE CEPA provides an example of how tariff liberalisation can coincide with rapid growth in bilateral trade, while the India-Australia ECTA demonstrates how preferential access can expand opportunities for Indian goods in a developed market.
But the effectiveness of FTAs will ultimately depend on more than tariff reductions.
Indian exporters need reliable information, competitive logistics, quality certification, access to finance, efficient customs procedures and a clear understanding of rules of origin.
MSMEs and smaller producers will need particular support to make use of opportunities that may otherwise remain concentrated among larger companies.
The government’s increasing emphasis on digital Certificates of Origin, trade-information platforms and market outreach is therefore significant.
For India, FTAs are no longer simply diplomatic or negotiating achievements. They are increasingly being treated as instruments of export policy.
The larger goal is to turn preferential market access into higher exports, broader product penetration, greater participation by Indian businesses, stronger services trade, more investment and employment.
As more agreements enter implementation and existing ones are upgraded, the measure of success will increasingly be visible not in the number of pacts India has signed, but in how effectively Indian businesses use them.
The transition from “signing trade deals” to “putting trade deals to work” could therefore become one of the most important phases of India’s export strategy in the coming years.
