In the last one year, India has signed, concluded, or advanced more trade agreements than in any comparable period in its post-liberalisation history. In roughly twelve months, New Delhi has taken the India–UK Comprehensive Economic and Trade Agreement (CETA) from signature to entry into force, brought the India–EFTA Trade and Economic Partnership Agreement (TEPA) into effect, sealed a Comprehensive Economic Partnership Agreement (CEPA) with Oman, concluded a Free Trade Agreement with New Zealand, closed out nearly two decades of on-and-off negotiations with the European Union, delivered a framework for an interim trade arrangement with the United States, and launched formal FTA talks with the Gulf Cooperation Council (GCC) bloc and the Eurasian Economic Union (EAEU).
Taken together, India’s preferential trade network now touches roughly 38 countries. What began as a cautious, selective approach to trade agreements has turned into what officials in New Delhi are calling a “trade architecture” strategy and the timing is not accidental.
India’s Evolving FTA Strategy: From Market Access to Strategic Economic Partnerships
India’s approach to Free Trade Agreements (FTAs) has undergone a significant transformation over the past decade. While the earlier generation of FTAs primarily focused on tariff liberalization and expanding market access, the recent agreements signed since 2025 reflect a broader strategic objective i.e. integrating India into global value chains (GVCs), attracting investments, strengthening domestic manufacturing and positioning India as a trusted global supply chain hub.
The First Generation of FTAs: Trade-Centric Agreements
India’s earlier FTAs with ASEAN, Japan, South Korea, Sri Lanka, Singapore and MERCOSUR were negotiated during a period when the country’s primary objective was to expand merchandise trade by reducing import duties. These agreements largely concentrated on:
* Tariff reduction on goods
* Limited coverage of services and investment
* Restricted provisions on digital trade, sustainability and government procurement
* Minimal emphasis on supply chain resilience or technology collaboration
Although these agreements improved bilateral trade, several faced criticisms due to rising imports without a proportionate increase in India’s exports. Concerns were also raised over widening trade deficits, inadequate Rules of Origin enforcement and limited utilization by Indian exporters, particularly MSMEs.
The Shift in India’s Trade Strategy
The global economic landscape has changed considerably since the COVID-19 pandemic. Geopolitical realignments, supply chain disruptions, protectionist measures and the global “China+1” manufacturing strategy have compelled India to rethink its trade policy.
Consequently, India’s recent FTAs represent a shift from “market access” to “strategic economic integration.” Instead of viewing FTAs merely as instruments for lowering tariffs, they are increasingly being used as catalysts for investment, technology transfer, industrial development and export competitiveness.
Why now? Reading the strategy behind the surge
Three forces appear to be driving this compressed burst of dealmaking:
1. De-risking from a single-market dependency. With US tariff actions creating unpredictability for Indian exporters – particularly in textiles, gems and engineering goods, diversifying market access across the UK, EU, EFTA, Oceania and the Gulf reduces India’s exposure to any one trading partner’s policy swings.
2. Competing for the “China plus one” supply chain shift. As global manufacturers look to diversify sourcing away from China, FTAs that lower tariffs and simplify rules of origin make India a more credible alternative manufacturing and export base, especially in textiles, engineering goods, pharmaceuticals and electronics.
3. Domestic political economy — “Atmanirbhar Bharat” meets market access. Indian negotiators have been explicit that every agreement in this cycle protects “sensitive” sectors – dairy, agriculture, and select domestic industries, while opening up manufacturing and services exports. This reflects a calculated balance: liberalise where India has comparative advantage (textiles, leather, engineering goods, IT/ITES, professional mobility) while shielding sensitive rural constituencies. The government has tied the entire push to its longer-term “Viksit Bharat @2047” (Developed India by 2047) ambition.
An analytical view: gains, gaps, and the fine print
The headline trade and GDP figures – tens of billions of dollars in additional bilateral trade, single-digit-billion-pound GDP contributions from the UK deal alone are meaningful but need to be read with some caution:
* These are long-run modelled estimates, not guarantees. The UK government’s own £5.1 billion GDP estimate for India is explicitly a 2040 projection relative to a “no agreement” counterfactual, not an annual certainty. Realisation depends on how many exporters actually claim preferential tariffs (utilisation rates), whether firms can meet rules-of-origin requirements, and how quickly customs and certification systems adapt – India’s Certificate of Origin issuances rose from about 685,000 in FY2023-24 to roughly 721,000 in FY2024-25, showing rising but still partial uptake of existing FTA preferences.
* Sectoral winners are clearer than aggregate ones. Labour-intensive, employment-heavy sectors – textiles and apparel, leather and footwear, gems and jewellery, marine products, engineering goods stand to gain the most tangible, near-term benefit from tariff elimination in the UK, EU, Oman and New Zealand markets. Sectors like Scotch whisky and automobiles illustrate the flip side: India is opening its own market meaningfully (UK whisky tariffs falling from 150% toward 40% over a decade, auto tariffs cut sharply), which will pressure some domestic producers even as it lowers costs for consumers.
* The EU deal is the biggest wildcard. It is the most consequential but execution intensive. Beyond tariff reductions, its impact will hinge on compliance with stringent EU standards on SPS, carbon, data and IP. With ratification and implementation likely to take time, the economic benefits are expected to materialise gradually rather than immediately.
* The US relationship remains unresolved. A framework for an “interim” arrangement is not a comprehensive FTA, and tariff overhang from 2025 US actions continues to be a swing factor in India’s export outlook, arguably a bigger near-term risk to GDP than any of the completed deals are an upside.
What this means for India’s GDP trajectory
All the official forecasters (IMF, World Bank and RBI) have trimmed FY27 estimates over the past few months, converging around 6.4–6.6%, driven by the energy shock, not the trade agenda. The consistent thread across these projections is that India remains the fastest-growing major economy in the world, but the FTA wave is best understood as a structural tailwind rather than a near-term growth trigger. Trade agreements typically take several years to show up meaningfully in export and investment data, what they do more immediately is reduce policy uncertainty, diversify India’s trade base away from any single large partner, and signal to global manufacturers and investors that India is opening up on its own terms rather than under external pressure.
The bottom line
India’s twelve-month FTA sprint — UK, EFTA, Oman, New Zealand, and the long-awaited EU deal, alongside a US framework and new GCC and EAEU negotiations reflects a structural shift in India’s trade approach, from defensive trade policy to actively and aggressively securing market access, diversifying trade relationships and embedding India deeper into global value chains. India is quietly shifting from just being a large consumer market to becoming a global trade rule-shaper, with FTAs serving as tools for influence, investment attraction and supply-chain positioning rather than sheer export growth. Over time, India could gain influence over emerging trade standards in areas such as digital trade, sustainability, supply-chain resilience and professional mobility.
The real outcome of India’s FTA sprint may not be more trade alone. It may be India’s emergence as one of the few economies that helps shape how global trade gets positioned over the next decade.
The economic upside is real but back-loaded: the tangible near-term impact is risk management (reducing dependence on any single market amid global tariff volatility) and positioning India as a credible alternative manufacturing and export hub. Whether the GDP arithmetic in official projections materialises will depend less on the signatures already inked and more on implementation, ratification timelines, exporters’ ability to actually use the preferences on offer, and whether the still-unresolved pieces, especially with the United States, get finalised in the way India’s trade negotiators are hoping for.
About the Author: Ajay Bagri, Chairman CFO Council, ASSOCHAM and CFO,SEIL Energy India Limited
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