Expanding India’s Trade Footprint: New FTAs and Strategic Market Access Gains
1) India ranks 3rd among Global South economies in trade partnership diversity, as per United Nations Conference on Trade and Development (UNCTAD) Trade and Development Report 2025, and its diversity index score is higher than all Global North countries.
2) India–European Union (EU) Free Trade Agreement (FTA) negotiations were concluded in January 2026 and described as the “Mother of All Deals,” marking a major strategic trade milestone in 2026.
3) India concluded FTAs in Financial Year (FY) 2025-26 with the United Kingdom (UK), Oman, and New Zealand, expanding market access across Europe, the Gulf, and Oceania.
4) India concluded the first round of Israel FTA negotiations and formally launched trade negotiations with the Gulf Cooperation Council (GCC) in February 2026, widening the West Asia trade agenda.
5) India is expanding negotiations with ASEAN, Mexico, and Canada, indicating a push to widen trade architecture beyond traditional partners and deepen global value chain integration.
6) The India–EU FTA provides preferential access across 97% of EU tariff lines, covering 99.5% of trade value, while retaining policy flexibility for sensitive sectors and development priorities.
7) Under the India–EU FTA, 70.4% of tariff lines covering 90.7% of India’s exports get immediate duty elimination, benefiting textiles, leather-footwear, tea, coffee, spices, toys, sports goods, gems-jewellery, and marine products.
8) In the India–EU FTA, 20.3% tariff lines covering 2.9% of exports get zero duty in 3–5 years, and 6.1% tariff lines covering 6% of exports get preferential access via reductions or tariff-rate quotas.
9) Labour-intensive exports gaining from the India–EU FTA exceed INR 2.87 lakh crore (USD 33 billion), covering textiles-apparel, marine, leather-footwear, chemicals, plastics-rubber, sports goods, toys, and gems-jewellery.
10) The EU offered services commitments across 144 subsectors, including Information Technology/Information Technology enabled Services (IT/ITeS), professional, education, and business services, creating a stable platform for Indian services exports.
11) India–Oman Comprehensive Economic Partnership Agreement (CEPA) was signed in December 2025, providing zero-duty access on 98.08% of Oman tariff lines, covering 99.38% of India’s exports by value.
12) The India–Oman CEPA is the first instance of a partner extending commitments on traditional medicine across all modes of supply, strengthening opportunities for India’s AYUSH sector through an institutional framework.
13) India–New Zealand FTA (concluded 2025) eliminates duties on 100% of New Zealand tariff lines from entry into force, giving zero-duty access for all Indian exports and supporting farmers and Micro, Small and Medium Enterprises (MSMEs).
14) India–UK Comprehensive Economic and Trade Agreement (CETA) signed in 2025: bilateral trade is USD 56 billion, the target is doubling by 2030, and agriculture/processed food exports are projected to rise over 50% in three years.
15) India–UK CETA includes a Double Contribution Convention (DCC) removing dual social security contributions, with estimated savings over ₹4,000 crore for Indian companies and professionals working in the UK.
Must Know Terms :
1) Trade Partnership Diversity Index: Measures how widely a country’s trade is spread across partners; higher implies lower concentration risk. UNCTAD Trade and Development Report 2025 places India 3rd among Global South economies on partnership diversity and notes India’s score exceeds all Global North countries. The metric is used to assess resilience to shocks by limiting overdependence on a few markets.
2) Tariff-rate quotas (TRQs): Allow a fixed quantity of imports at a lower tariff, with higher tariffs above the quota. In the India–EU FTA package described, 6.1% of tariff lines covering about 6% of India’s exports obtain preferential access through reductions or TRQs. TRQs typically apply to sensitive items where full liberalisation is politically difficult yet controlled market access is granted.
3) Double Contribution Convention: Removes dual social security payments when professionals are temporarily posted abroad. Under India–UK CETA (signed 2025), a DCC is included to avoid simultaneous contributions in India and the UK for eligible workers and employers. The stated estimated savings exceed ₹4,000 crore for Indian companies and professionals working in the UK, improving cost competitiveness overall for talent abroad.
4) Modes of supply: Classify how services trade is delivered—cross-border supply, consumption abroad, commercial presence, and presence of natural persons. India–Oman CEPA is described as the first case where a partner extended commitments on traditional medicine across all modes of supply, strengthening market certainty for India’s AYUSH services. In the India–EU context, EU offered commitments across 144 services subsectors.
5) Duty Elimination Schedule: Timeline for cutting tariffs to zero or preferential rates, often split into immediate and phased tranches. In the India–EU FTA description, 70.4% of tariff lines covering 90.7% of India’s exports receive immediate duty elimination; 20.3% tariff lines covering 2.9% exports get zero duty in 3–5 years. Remaining lines may get reductions or TRQs for exporters.
6) Preferential Market Access: Partners apply lower tariffs than they apply to non-partners. India–EU FTA is described as giving preferential access across 97% of EU tariff lines, covering 99.5% of trade value. India–Oman CEPA gives zero-duty access on 98.08% of Oman tariff lines covering 99.38% of India’s exports by value; New Zealand offers 100% zero-duty from entry immediately.
MCQ
1. India ranks among Global South economies in trade partnership diversity at:
A) 1st
B) 2nd
C) 3rd
D) 5th
2. The India–EU FTA negotiations were concluded in:
A) January 2025
B) January 2026
C) December 2025
D) February 2026
3. FTAs concluded by India in FY 2025-26 include agreements with:
A) UK, Oman and New Zealand
B) EU, Canada and Mexico
C) USA, Oman and Israel
D) Japan, UK and GCC
4. India formally launched trade negotiations with which grouping in February 2026?
A) ASEAN
B) African Union
C) Gulf Cooperation Council
D) European Free Trade Association
5. India is expanding negotiations beyond traditional partners to deepen:
A) Currency union mechanisms
B) Global value chain integration
C) Agricultural subsidies
D) Monetary coordination frameworks
6. The India–EU FTA provides preferential access across what percentage of EU tariff lines?
A) 85%
B) 90%
C) 95%
D) 97%
7. Under the India–EU FTA, immediate duty elimination covers what percentage of India’s exports?
A) 70.4%
B) 90.7%
C) 97%
D) 99.5%
8. In the India–EU FTA, zero duty in 3–5 years applies to tariff lines covering:
A) 6% of exports
B) 2.9% of exports
C) 20.3% of exports
D) 90.7% of exports
9. Labour-intensive exports gaining from the India–EU FTA exceed:
A) INR 1.5 lakh crore
B) INR 2 lakh crore
C) INR 2.87 lakh crore
D) INR 4 lakh crore
10. The EU offered services commitments across how many subsectors?
A) 120
B) 132
C) 144
D) 160
11. India–Oman CEPA provides zero-duty access on what percentage of Oman tariff lines?
A) 90.7%
B) 97%
C) 98.08%
D) 99.38%
12. The India–New Zealand FTA eliminates duties on:
A) 70% of tariff lines
B) 85% of tariff lines
C) 97% of tariff lines
D) 100% of tariff lines
13. Bilateral trade between India and the UK under CETA context is approximately:
A) USD 40 billion
B) USD 56 billion
C) USD 75 billion
D) USD 100 billion
14. The target under India–UK CETA is to double bilateral trade by:
A) 2028
B) 2030
C) 2035
D) 2040
15. The Double Contribution Convention under India–UK CETA is estimated to save over:
A) ₹1,000 crore
B) ₹2,500 crore
C) ₹4,000 crore
D) ₹6,000 crore
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