India is vigorously pursuing a renewed and strategic approach to free trade agreements (FTAs) as a core component of its economic diplomacy. This push aims to secure better market access for Indian goods and services, attract foreign investment, and integrate more deeply into global value chains. The strategy involves both concluding new agreements and reviewing existing ones to ensure they serve contemporary national interests.
Recently Concluded Free Trade Agreements
In a significant move, India has successfully finalized and implemented two major trade pacts in recent years. The first is the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which came into force on May 1, 2022. This landmark deal with one of India's top trading partners aims to boost annual bilateral trade to $100 billion within five years. It offers Indian exporters zero-duty access to the UAE market for over 97% of its tariff lines, covering sectors like gems and jewellery, textiles, leather, and engineering goods.
The second key agreement is the India-Australia Economic Cooperation and Trade Agreement (ECTA), effective from December 29, 2022. This pact provides duty-free access for Indian products across a wide range, including textiles, leather, furniture, and select agricultural products. A major win for the services sector, it also offers extended post-study work visas for Indian students and professionals in Australia, facilitating easier movement of skilled workers.
Ongoing and Advanced FTA Negotiations
India is currently engaged in several high-stakes negotiations to expand its FTA network. A primary focus is the India-UK Free Trade Agreement. Talks have progressed through multiple rounds, with both sides expressing a strong desire to conclude a balanced and mutually beneficial deal. Key discussion points include market access for goods like textiles and Scotch whisky, services, intellectual property rights, and digital trade.
Equally crucial are the resumed negotiations for a India-European Union (EU) trade and investment agreement. After a hiatus of nearly nine years, talks restarted in 2022. This potential agreement with one of the world's largest economic blocs could dramatically increase trade flows. However, it involves complex discussions on sustainability, geographical indications, and data protection standards.
Other significant negotiations include the India-Canada Comprehensive Economic Partnership Agreement, though political tensions have caused delays, and the India-Israel FTA, which is also under discussion. Furthermore, India is part of the broader Indo-Pacific Economic Framework (IPEF), focusing on modern trade aspects like supply chains, clean energy, and fair trade practices.
Reviewing Old Pacts and The Strategic Shift
India's FTA strategy is not just about new deals; it also involves a critical reassessment of existing ones. The government is actively reviewing older agreements, such as those with ASEAN, Japan, and South Korea. The goal is to address long-standing trade imbalances where imports have grown faster than exports. India seeks more equitable terms, including stricter rules of origin to prevent third-country goods from being routed through FTA partner nations and gaining undue duty benefits.
This comprehensive review underscores a strategic shift from signing FTAs as a matter of course to a more calculated, outcome-oriented approach. The focus is now squarely on securing tangible economic advantages for Indian businesses, farmers, and workers. The government emphasizes that new-generation FTAs must cover not just goods but also services, digital trade, and intellectual property, reflecting the modern economy.
The broader objective is clear: to position India as a competitive, integral player in global trade. By securing preferential access in key markets through these FTAs, India aims to boost its manufacturing sector under initiatives like 'Make in India' and create a more resilient and robust export-oriented economy for the future.
