India's Trade Agreements and Export Growth

Summary of India's Trade Agreements and Export Performance

1. Trade Agreements Overview

• India is actively expanding its network of Free Trade Agreements (FTAs) to enhance market access for exporters, reflecting the country’s economic potential and international confidence.
• Recent FTAs aim to convert market access into increased export participation, investment, and employment while safeguarding domestic interests.

2. Export Performance Statistics

• FY 2025-26: Combined merchandise and services exports reached US$ 863.1 billion, with merchandise exports at US$ 441.8 billion.
• April-June 2026: Estimated combined exports at US$ 232.73 billion, an increase of 11.37% from the previous year.
• Key FTA partners for merchandise exports in FY 2025-26:
  • UAE: US$ 37,359.11 million
  • United Kingdom: US$ 13,444.19 million
  • Australia: US$ 7,284.17 million

3. Key FTAs and Their Impacts

• India-UAE CEPA (Effective May 1, 2022):

  • Largest individual FTA export market for India.
  • Bilateral trade exceeded US$ 100 billion in FY 2024-25, with a target to double this to US$ 200 billion by 2032.

• India-Australia ECTA (Effective December 29, 2022):

  • India’s first trade agreement with a developed economy in over a decade.
  • Exports to Australia rose from US$ 4 billion (FY 2020-21) to US$ 7.28 billion (FY 2025-26), marking an 80%+ growth.

4. Export Facilitation Initiatives

• Certificate of Origin (CoO):

  • Exporters must provide proof of origin to benefit from preferential tariff treatment.
  • Increased issuance of CoOs under recent FTAs indicates effective utilization of tariff concessions.

• e-CoO 2.0:

  • Digital system for issuing CoOs, streamlining the process for exporters.

5. Product Diversification and Market Access

• Recent FTAs have expanded the range of products exported:
  • UAE: 8,053 tariff lines (6.7% increase from 2021-22).
  • Australia: 5,668 tariff lines (5.0% increase from 2020-21).

6. Opportunities for Service Providers

• Services contribute nearly 30% of India’s employment, with exports at US$ 421.3 billion (FY 2025-26).
• Notable provisions in recent FTAs:
  • India-New Zealand FTA: Pathway for 5,000 skilled Indians for up to three years.
  • India-UK CETA: Facilitates smoother entry for professionals and prevents dual social-security payments.

7. Future Trade Agenda

• Ongoing negotiations for approximately ten new trade agreements with countries including Peru, Chile, and Israel.
• Upgrading existing agreements such as the India-Korea CEPA and India-Sri Lanka ETCA.

8. Significance of FTAs

• FTAs are crucial for connecting Indian businesses to global markets, driving export growth, and enhancing India's position in international trade.
• The balanced approach aims to protect domestic sectors while expanding market opportunities for labor-intensive industries like textiles and agriculture.

9. Conclusion

• India's FTAs are entering a deeper implementation phase, expected to further diversify trade and strengthen commercial relationships, contributing to the vision of a Viksit Bharat by 2047.

References

• Ministry of Commerce & Industry
• Prime Minister's Office (PMO)
• PIB Press Releases