India's FTAs and What They Mean for Global Businesses

Executive Summary

A guide to India's current and upcoming Free Trade Agreements and their implications for market access, sourcing strategies, and supply chain design for global businesses.

India's FTA Trajectory

After years of cautious engagement with trade agreements, India has adopted a more proactive approach to FTAs. Recent agreements with the UAE, Australia, and the UK (under negotiation) signal a strategic shift toward building a network of preferential trade relationships. For global businesses, these agreements can significantly alter the economics of sourcing from India, exporting to India, and using India as a hub for regional supply chains.

The UAE CEPA

The India-UAE Comprehensive Economic Partnership Agreement, which entered into force in 2022, provides preferential tariff access for Indian goods in the UAE market and vice versa. For businesses using India as an export base, the UAE CEPA reduces tariffs on a wide range of manufactured goods — including textiles, jewelry, pharmaceuticals, and engineering products. It also provides a gateway to the broader Gulf Cooperation Council (GCC) market through re-export and third-country trade flows.

The Australia ECTA

The India-Australia Economic Cooperation and Trade Agreement provides preferential access for Indian goods in the Australian market, covering pharmaceuticals, textiles, leather, jewelry, and processed food products among others. It also facilitates services trade and professional mobility. For Australian companies, it reduces barriers to sourcing from India and investing in Indian operations.

FTAs Under Negotiation

India is engaged in FTA negotiations with the UK, the EU, Canada, Israel, and GCC countries. Each negotiation involves different strategic priorities and sensitivities. The India-UK FTA has been closely watched given the scale of bilateral trade and investment flows. The India-EU FTA negotiations are more complex given the EU's requirements on sustainability, labor standards, and intellectual property.

Using FTAs in Supply Chain Design

For global businesses, FTAs create real opportunities — but capturing the benefits requires proactive supply-chain design. Rules of origin requirements, documentation obligations, and tariff-line-level analysis are necessary to determine whether an FTA actually benefits a given product or service flow. Companies that invest in this analysis can build meaningful cost advantages over competitors who operate on default supply-chain configurations.

What This Means for Businesses and Investors

India's expanding FTA network is a structural positive for companies using India as a manufacturing or services export base. As more agreements come into force, the addressable market for India-origin goods and services at preferential tariff rates will expand. For investors evaluating India, understanding which FTAs apply to target sectors — and how to structure operations to capture those benefits — is a source of genuine competitive advantage.