India has signed nine trade agreements since 2020 | Photo Credit: metamorworks

The coming years will be decisive for a vibrant economy like India which aspires to become a developed nation by 2047. Indian policymakers are navigating geopolitical conflicts, rising global trade protectionism, economic policy uncertainty and geo-economic fragmentation. To address the challenges of a rapidly evolving global economic environment, India has steadily expanded its global trade partnerships through Free Trade Agreements (FTAs).

FTAs will play a key role in diversifying India’s trade and serve as a catalyst for manufacturing expansion in India. The first and foremost opportunity is the enhanced market access and tariff preferences for Indian exports. While strengthening the bilateral economic relations, India has not only focussed on large markets like the EU having a market size of $21 trillion but also captured the opportunity in smaller economies like Oman. The whole idea of FTAs is to diversify, and diversification depends on understanding global demand rather than just domestic supply capabilities. India’s export diversification is already improving but to build it further investment in technology and skills will be crucial.

Market access

Tariff concessions under FTAs would improve entry and positioning of products which are not the leading segments of Indian exports such as agriculture, processed food, medical devices, etc. Additionally, FTA will secure a larger market share where India already has a strong presence such as textiles, gems and jewellery, electronics, pharma, chemicals and engineering goods. In this manner, overall manufacturing will get a fillip through diversified sources of demand across various segments.

India has signed nine trade agreements since 2020, with Mauritius, the UAE, Australia, European Free Trade Association, the UK, Oman, New Zealand and European Union, in addition to the US where the contours of agreement are yet to be finalised. These nine partners constitute almost 40 per cent of India’s total trade. But the total imports by these nine partners stood at more than $13 trillion (CY2025) whereas their imports from India accounted for less than 2 per cent ($255 billion). Therefore, there is a significant untapped export opportunity, and these agreements can help generate momentum in value added exports.

India hopes to become a $30-35 trillion economy by 2047. To achieve this target, our exports will have to play a critical role and reach $9-10 trillion. A transition to an increasingly demand-led economic growth model, supported by both domestic and regional sources, can provide a way forward.

Raw material supply

To become a major global manufacturing hub, an uninterrupted supply of raw material is also extremely important. The ongoing West Asia conflict has clearly underlined the significance of diversified sources of import for crude oil, which is a main raw material for refined petroleum products. This holds true for other imported products as well which serve as the raw material or intermediate product for the manufacturing of finished products. FTAs will open the window for smoother supply of imported raw materials. Critical minerals, for instance, are key raw materials for several high-demand manufactured goods.

Thus smooth supply of raw material and greater market access at concessional tariff for finished products, FTAs expansion Indian manufacturing.

As India is steadily expanding its global trade partnerships, on similar lines its partner countries are also engaging with other countries to accelerate trade and growth. Therefore, the competitiveness trajectory must be understood in a wholesome way. Also, raising the quality of our products to global standards and competitive pricing, along with moving up the value chain through design and branding, are ways to gain a niche in the market. Focus on enhancing competitiveness and economic cooperation through FTAs can surely bring in renewed dynamism for Indian manufacturing.

The writer is ASSOCHAM President

Published on June 15, 2026