India signs major trade deals; implementation and economic impact the real test

The Story in Brief

India has spent years negotiating preferential access and has signed trade agreements with partners including the UAE, Australia, the UK, Oman, the European Free Trade Association, ASEAN, Japan, South Korea and Singapore, while talks continue with the US and Canada. A recent agreement with the European Union opens a major export market. Experts say the country’s strategy is shifting from protecting domestic markets towards deeper integration with global value chains, but the main challenge is using the market access created by these deals.

Utilisation of these agreements is uneven: the Global Trade Research Initiative estimates only about 20-30% of India’s eligible exports currently claim FTA preferences, versus 60-70% for partner countries exporting to India. Some agreements have already coincided with export gains – non-oil exports to the UAE rose 14% year‑on‑year in the three months after CEPA, and merchandise exports to Australia rose from $4 billion in FY2020‑21 to $8.57 billion in FY2024‑25 after ECTA. But exporters face hurdles: compliance with rules of origin, certification, higher production costs, an inverted duty structure, stricter sustainability rules such as the EU Carbon Border Adjustment Mechanism (more than €6 billion of Indian exports fall within its scope) and gaps in testing, logistics and scale. MSME participation in exports remains small: about 0.95% of firms export and, of 1.58 crore enterprises on the Udyam portal, roughly 1.5 lakh report export activity.

The Indian Opinion

Some public commentary treats new FTAs as automatic engines of export growth; that view is one‑sided because the agreements only lower tariffs-operational and regulatory barriers determine whether firms actually export. Conversely, an exclusive focus on implementation challenges can underplay the value of market access that already shows early gains in some partnerships. Ordinary readers should note the uncertainty: measured export rises after a deal do not prove universal or sustained benefits. A balanced view is that India needs both: market access through treaties and an implementation push-improving compliance support, testing infrastructure, logistics and correcting inverted duties-while recognising that outcomes will vary by sector and take time to materialise.

Original article: India’s big trade deals done. Now the real test (economictimes.indiatimes.com)

This story was summarised and commented on by AI from the source linked above.