FTAs building a new trade architecture for Viksit Bharat

By Rajesh Agrawal

Achieving the vision of a ‘Viksit Bharat’ requires sustaining a high rate of economic growth over the next two decades. India’s massive domestic market is a vital engine for this growth, but relying on it alone may not be sufficient. To achieve globally competitive scale and true technological transformation, India is integrating deeply with the global economy through a network of Free Trade Agreements (FTAs). While WTO agreements provide the foundation for a rules-based global trading system, FTAs enable willing partners to pursue deeper integration in additional areas of interest, building on the WTO baseline. The 384 notified FTAs in force underscore their utility as critical drivers of economic integration and rule-making customized to partner countries. They are the institutional blueprint for securing crucial market access while protecting Indian businesses from the unpredictable winds of global geopolitical storms.

Access to global economic opportunities is also essential for Indian businesses seeking the scale to emerge as global champions. But the gains are not limited to large businesses; FTAs open vital windows of opportunity for start-ups, MSMEs, farmers, fisherfolk, and Indian talent looking to monetize their skills on the world stage. The binding commitments cover tariffs, services market access, and transparent trade rules, delivering the certainty Indian businesses require to invest for the long term.

India’s trade negotiation strategy has matured significantly, focusing on complementary economies that serve as primary export markets for goods and services. A key objective of recent FTAs is securing a level playing field for Indian exporters in vital markets like the EU, the UK, and Australia. This parity is especially urgent for labour-intensive sectors such as textiles, apparel, and footwear, where Indian products have historically faced steep tariffs while competitors enjoyed duty-free access. India is also negotiating Trade Agreements with Canada, Israel, and blocs like the EaEU and MERCOSUR.

Services are central to India’s export strategy and a core focus of its FTA negotiations. By locking in commitments on cross-border digital delivery, recent FTAs help drive investor confidence across the rapidly expanding Global Capability Center (GCC) ecosystem, tech startups, and digital innovators.

Beyond digitally delivered services, FTAs have allowed India to innovate at the negotiating table, securing binding commitments that enhance mobility for Indian talent, especially its youth. Key achievements include mobility provisions and side-letters for students and professionals, frameworks like the India-UK Double Contributions Convention (DCC) to prevent dual social security taxation on temporary assignments, and mobility rights in niche areas such as yoga.

A hallmark of India’s next-generation FTAs is the recognition of the intrinsic link between trade and investment. By providing access to major global markets while easing the import of key manufacturing inputs, this network combined with increasing demand makes India a highly attractive destination for manufacturing and investment.

Recent agreements go further by explicitly linking market access to investment outcomes. A prime example is the landmark India-EFTA agreement, which conditions market access for EFTA nations on a $100 billion FDI commitment and one million jobs in India. The India–New Zealand FTA features comparable provisions, leveraging access to India’s vast consumer market in exchange for long-term investment commitments.

Modern trade is no longer confined to tariffs; it requires navigating 21st-century dimensions with an equal focus on rules, including Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, and Trade Facilitation (TF). India’s next-generation FTAs actively engage with these frameworks.

Product standards and other regulatory requirements frequently pose greater hurdles to market access than tariffs. Provisions for regulatory harmonization and cooperation within India’s FTAs offer structured, institutional mechanisms to mitigate these barriers for Indian exporters.

Environmental and labour standards are emerging as potential barriers to trade, and not engaging with them is no longer an option. India’s new FTAs build cooperative arrangements to address these concerns, but not in a manner inimical to Indian interests. They assure global partners that India seeks competitive advantages through genuine innovation and scale, avoiding a “race to the bottom” on standards.

India’s FTA policy is not piecemeal or country-by-country. It intentionally targets complementary economies that together represent two-thirds of global GDP and 75% of global import demand.

Crucially, the negotiation of these FTAs relies on continuous stakeholder engagement and a whole-of-government approach. This ensures trade policy is aligned with India’s broader imperatives related to industrial development, innovation, and socio-economic progress, with agreements structured so that vulnerable sectors and populations remain protected.

Specifically, FTAs include robust provisions to ensure that opening the Indian market does not cause disruptive shocks to domestic stakeholders. Liberalization in vulnerable and strategic sectors is phased over an extended period to allow local industries time to adjust. Several key sectors, including agriculture, are excluded judiciously to protect MSMEs and farmers, while safeguard measures stand ready against sudden import surges.

The ultimate goal is a robust, synergistic, rules-based trading ecosystem covering the vast bulk of India’s international trade. By developing deeply rooted investment and value-chain linkages, strategic FTAs will liberate Indian businesses to focus on what truly matters: expanding, innovating, and marketing, free from the friction of policy uncertainty and regulatory hurdles.

(The author is Secretary, Department of Commerce.)