What Happened
- Commerce Minister Piyush Goyal stated that India's portfolio of Free Trade Agreements (FTAs) with developed economies will help sustain export growth despite global trade disruptions caused by US tariff impositions and the West Asia conflict.
- India has concluded nine FTAs with 38 countries, covering approximately 70% of global trade markets with preferential access — described by Goyal as a "game-changer" for Indian exports.
- The India-US bilateral trade framework agreement reduced US import tariffs on Indian goods from 50% to 18%, with an additional 25% import duty removed via Executive Order in February 2026.
- India's exports crossed US$825 billion in FY 2024–25 (merchandise ~$440 billion + services exports), with the new FTAs expected to push this further.
- Agreements with UK and Oman are set for implementation in April 2026; the NZ FTA likely from September.
Static Topic Bridges
Free Trade Agreements (FTAs): Concepts and India's Experience
A Free Trade Agreement is a treaty between two or more countries to reduce or eliminate tariffs, quotas, and non-tariff barriers on goods and services traded between them. FTAs exist on a spectrum from Preferential Trade Agreements (PTAs) to Comprehensive Economic Partnership Agreements (CEPAs).
- FTA types: PTA (partial tariff reduction), FTA (elimination of most tariffs), CEPA (FTA + services + investment + intellectual property), CECA (comprehensive, broadest coverage)
- India has historically been cautious about FTAs: has only about 13 FTAs in force; notably absent from RCEP (withdrew in 2019 citing concerns about Chinese imports and dairy/agriculture exposure)
- Key existing FTAs: India-ASEAN FTA (2009), India-South Korea CEPA (2010), India-Japan CEPA (2011), India-UAE CEPA (2022), India-Australia ECTA (2022), India-UK FTA (under finalisation)
- India's trade balance with ASEAN turned negative after the FTA — a frequently cited concern about FTA design quality (inadequate rules of origin, non-tariff barriers not addressed)
- The RCEP withdrawal (2019) was driven by three concerns: surge of Chinese goods through ASEAN route, dairy sector vulnerability, ratchet clause obligations
Connection to this news: The nine new FTAs concluded over 2022–2025 represent a strategic shift in India's FTA posture — from defensive caution to aggressive market access pursuit — aimed at capturing supply-chain opportunities from the US-China trade rift and building resilience against tariff volatility.
India-US Trade Relations and the 2026 Bilateral Trade Framework
India and the United States are each other's significant trade partners, but the relationship has been marked by recurring trade disputes over tariffs, market access, and intellectual property. The 2026 bilateral trade framework represents a significant step toward structured market access.
- India-US bilateral trade in goods reached approximately $130 billion in FY 2024–25; the US is India's largest export destination
- Key Indian exports to the US: software services, pharmaceuticals, gems and jewellery, textiles, engineering goods
- Key US complaints: India's high import tariffs (average applied tariff ~13%), restrictions on agricultural products, data localisation rules
- The 2026 India-US trade framework: US reduced tariffs on Indian imports from 50% to 18%; removed additional 25% import duty (imposed as part of Trump's "reciprocal tariff" actions) via Executive Order in February 2026
- Labour-intensive sectors set to benefit: textiles, leather, footwear, gems and jewellery, apparel — high employment-intensity sectors where India is cost-competitive
- A full FTA with the US is a medium-term goal; the 2026 framework is an "interim deal" or "initial trade framework" — not yet a comprehensive FTA
Connection to this news: Piyush Goyal's statement that the US FTA "will happen as soon as we can get that competitive edge" signals the political momentum behind the trade relationship — while the interim framework provides immediate export relief as Indian exporters face global uncertainty from the West Asia conflict.
India's Export Performance and the Merchandise Export Target
India has set an ambitious target to double its goods and services exports as part of its Vision 2047 and the Foreign Trade Policy 2023 framework. The 2022–27 Foreign Trade Policy replaced the volume-based target system with a more holistic export facilitation approach.
- India's merchandise exports in FY 2024–25: approximately $440 billion (up from ~$323 billion in 2022–23)
- Services exports: approximately $385 billion in FY 2024–25; India is the world's seventh-largest services exporter
- Key export destinations: US (~18% of merchandise exports), UAE (~10%), Netherlands, Bangladesh, UK
- Foreign Trade Policy 2023 removed the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS), replacing them with RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL for textiles
- Export Credit Guarantee Corporation (ECGC) and India Exim Bank are key institutional supports for export financing and credit risk coverage
Connection to this news: India's FTA portfolio is intended to shift export growth from being dependent on global commodity cycles (which are currently disrupted by the West Asia conflict and oil price volatility) toward structured market access guarantees in high-value developed country markets.
WTO Framework and India's Position on Trade Rules
India is an active participant at the World Trade Organization (WTO), using it both as a forum to defend market access and as a platform to advance developing country interests.
- WTO's MFN (Most Favoured Nation) principle requires that any tariff concession given to one WTO member must be extended to all; FTAs are an exception under GATT Article XXIV (for goods) and GATS Article V (for services) — allowed as long as the FTA covers "substantially all trade"
- India has invoked Special and Differential Treatment (SDT) provisions at WTO, maintaining higher tariffs for food security and development reasons
- India-US trade disputes at WTO: multiple disputes including steel and aluminium tariff cases, solar panels (India-US solar dispute under SC-DS456), and pharmaceutical patent issues
- India supports WTO reform but resists binding dispute settlement outcomes that constrain domestic policy space, particularly in agriculture and public stockholding for food security
Connection to this news: The FTAs being signed by India are WTO-consistent but represent bilateral fast-tracks that bypass the stalled multilateral Doha Development Round — reflecting a pragmatic pivot from multilateralism to bilateral market access negotiations as the WTO dispute settlement mechanism remains partially paralysed.
Key Facts & Data
- India concluded 9 FTAs with 38 countries (2022–2025), covering ~70% of global trade
- India-US interim trade framework: US tariffs on Indian goods cut from 50% to 18%; additional 25% duty removed via Executive Order, February 2026
- India's total exports FY 2024–25: ~$825 billion (merchandise ~$440B + services ~$385B)
- US remains India's largest export destination (~18% of merchandise exports)
- India-UK FTA and India-Oman FTA set for implementation April 2026
- India withdrew from RCEP in 2019; China, ASEAN remain outside India's FTA portfolio
- Foreign Trade Policy 2023 (valid to 2027) governs India's export facilitation framework
- Labour-intensive export sectors benefiting most: textiles, leather, footwear, gems and jewellery