With India rapidly expanding its network of free trade agree
ments (FTAs), trade experts have said the country’s next
priority should be ensuring effective utilisation of these pacts,
arguing that the gap between negotiated market access and
actual usage remains India’s biggest trade challenge.
According to industry experts, India has secured significant
tariff concessions and market access through agreements with
countries and blocs including Singapore, Japan, South Korea, the
UAE, Australia, ASEAN and EFTA, while recently concluding
trade pacts with Oman, New Zealand, the European Union and
the United Kingdom.
However, they noted that the real challenge now lies in
translating these negotiated benefits into tangible export gains.
Gulzar Didwania, Partner, Deloitte India, India’s FTA utilisation
rate has historically remained around 25 percent, far below the 70–80 percent levels seen in many developed economies, making
higher utilisation one of the most impactful trade policy
opportunities available to the country.
He argued that the policy focus should shift from merely signing
FTAs to ensuring their effective utilisation. Didwania noted that
India has already secured significant market-access gains,
including duty-free access for 99 percent of exports to the UK
under the Comprehensive Economic and Trade Agreement and
preferential access for over 99 percent of India’s exports by
trade value under the India-EU FTA.
He added that FTAs can help cushion geopolitical disruptions by
opening alternative export markets and deepening India’s
integration with global value chains.
According to Didwania, India’s long-term trade strategy should
focus on diversifying export destinations and products while strengthening domestic manufacturing competitiveness.
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Rudra Kumar Pandey, Partner, Shardul Amarchand Mangaldas
& Co, said improving FTA utilisation should be India’s foremost
trade priority, noting that while utilisation under the India
Australia Economic Cooperation and Trade Agreement has
reached around 84 percent, awareness and adoption remain
limited among MSMEs under several other agreements.
He observed that the gap between negotiated market access and
actual utilisation continues to be a major challenge,
underscoring the need for greater awareness, documentation
support and compliance assistance to help exporters fully
leverage preferential tariff benefits.
Pandey also called for targeted support to sectors such as
textiles, leather, engineering goods, pharmaceuticals and marine
products, which have secured substantial tariff concessions
under various FTAs.
He stressed the importance of strengthening domestic
certification systems, securing mutual recognition arrangements
for testing and conformity assessment, and developing robust
carbon accounting frameworks to meet evolving regulatory
requirements in global markets.
He added that firms capable of meeting higher standards of
quality, traceability and sustainability will be best placed to
benefit from India’s expanding FTA network.
Experts said technical assistance and affordable financing
support will be essential to help MSMEs comply with
increasingly stringent international trade requirements.
They also noted a gradual shift in India’s export profile towards
higher-value manufacturing, with electronics and machinery
accounting for a growing share of exports and smartphones
emerging as the country’s top export product.
At the same time, they warned that this transition heightens
dependence on imported components and intermediate goods
from China and East Asia.
Key sectors including electronics, pharmaceuticals, chemicals
and non-ferrous metals continue to rely heavily on imported
inputs, underscoring the importance of supply-chain resilience.
Pandey said India should view its FTA network as an external
market-access framework while building stronger domestic
manufacturing capabilities to fully leverage these opportunities.
He advocated lower tariffs on intermediate goods and capital
equipment, supported by investments in standards
infrastructure and technology upgradation.
According to the experts, India’s trade strategy should now focus
on improving utilisation of existing FTAs, strengthening
compliance capabilities and enhancing domestic manufacturing
competitiveness, particularly among MSMEs, to maximise