The Alchemy of Agreements: Examining India’s FTA’s in an Evolving Global Order

Why It Matters

The agreements lock in market access for over 99 % of Indian exports, boosting foreign investment and positioning India in global value chains, while tariff and customs reforms will determine whether the projected gains materialize.

Key Takeaways

• EU‑India deal targets $100 billion investment, 99.6% duty‑free access.
• UAE CEPA lifts bilateral trade 16% to $84.5 billion in one year.
• Australia and UK agreements cover 96%‑100% tariff‑free Indian exports.
• Intermediate‑goods tariffs remain above 5%, hindering “Make in India.”
• Customs complexity and port delays risk eroding FTA competitiveness.

Pulse Analysis

India’s trade policy has shifted from post‑1991 protectionism to an aggressive FTA strategy that targets developed economies and strategic regions. Since 2024, India sealed landmark agreements with the European Union, United Kingdom, United Arab Emirates, Australia and New Zealand, each designed to go beyond simple tariff reductions. The EU‑India TEPA promises roughly $100 billion of investment and near‑full duty‑free access for Indian exporters, while the UAE CEPA already lifted bilateral trade by 16% to $84.5 billion in a single year. These pacts open high‑value sectors—technology, precision engineering, digital services, and clean‑tech—to Indian firms, reinforcing the country’s ambition to integrate into global value chains.

The economic upside is substantial. Merchandise exports have climbed to $451 billion, and the Ministry projects a 7.4 % real GDP rise in FY 25‑26, partly driven by the expanded market access FTAs provide. Sectoral gains are evident: gems and jewellery, automotive components, chemicals and agricultural products have all posted double‑digit growth under the UAE deal, while the Australia and UK agreements grant tariff‑free entry for 96‑100% of Indian goods, unlocking new opportunities for textiles, engineering and services. Moreover, the EU partnership is expected to generate $18.7 billion in incremental trade and attract multinational firms such as ABB and Novartis, deepening India’s foothold in technology‑intensive supply chains.

Realizing these benefits, however, hinges on domestic reforms. Current tariff schedules still impose higher duties on intermediate inputs—often above 5%—creating cost inefficiencies for manufacturers pursuing the "Make in India" agenda. Complex customs procedures and port‑level delays further erode competitiveness, threatening to offset the gains from liberalised trade. Streamlining duty structures, simplifying clearance processes, and adopting sector‑specific digital trade accords can enhance regulatory certainty and ensure that the ambitious FTA portfolio translates into sustained export growth and investment inflows.