Answer

India engages in bilateral and regional trade agreements such as Free Trade Agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPA) to secure access to global markets. These deals are vital for navigating today’s dynamic trade environment, diversifying export opportunities, and strengthening India’s strategic and economic outreach.

How Trade Agreements Secure Market Access

• Diversified export markets: FTAs with the UAE (CEPA) and UK remove tariffs on textiles and gems, opening new consumers.
  Eg. Under India–UAE CEPA (2022), around 97% of Indian goods enjoy tariff-free access, boosting bilateral trade to $85 billion in 2023–24.
• Stronger ties with major economies: India–US and EU FTA talks aim to lock in duty cuts and predictable market entry.
• Regional integration: The ASEAN–India FTA grants tariff reduction across more than 4,000 products, boosting ties in Southeast Asia.
• Access to South Asian markets: SAFTA (South Asian Free Trade Area) eases intra‑SAARC tariffs, promoting regional trade.
  Eg. India–SAFTA trade rose from $6.8 billion in 2005‑06 to $28.5 billion in 2018‑19.
• Agricultural exports secured: FTAs with Chile and Japan (CEPA) ease select crop access while ensuring domestic safeguards.
  Eg. Under India–Japan CEPA (2011), approximately 90% of traded agricultural products see tariff removal.
• Market access through Preferential Trade Agreements: Agreements like India–Mauritius CECPA facilitate entry into service sectors.
  Eg. Since April 2021, more than 615 Mauritian exports received tariff relief and 95 service sectors opened to Indian firms.
• Trade deals foster stability: FTAs provide consistent tariff frameworks, reducing uncertainty for exporters.
  Eg. The UK–India FTA, set for July 2025, aims to eliminate tariffs on 99% of Indian exports, potentially doubling trade to $100 billion by 2030.

Leveraging FTAs/BTAs for Supply Chains

• Attracting FDI via FTAs: FTAs signal openness and support Make in India, boosting investment in manufacturing and services.
  Eg. The Australia–India ECTA (2022) secures access to critical minerals and EV supply chains, reinforcing green tech industries.
• Fallback consumer protection: India uses public consultations to ensure FTAs uphold domestic industry interests.
• Balancing tariffs and quotas: India’s trade pacts contain Tariff Rate Quotas (TRQs) to buffer sensitive sectors.
  Eg. In India–Mauritius CECPA, TRQs applied to sugar and garments help secure domestic suppliers.
• Tech and investment safeguards: CEPA with India–South Korea included limits on agriculture, protecting sensitive constituencies.
• Supply-chain resilience: FTAs allow sourcing of alternative inputs, reducing dependency on single countries.
  Eg. The UAE CEPA enabled a $2 billion food-processing facility, supporting Make in India output.
• Boosting pharma and automotive exports: FTAs with the UK, EU, and Japan open access for intermediate goods.
  Eg. The India–UK FTA removes 4–16% tariffs on textiles, footwear, and marine products.
• Strategic supply‑chain diversification: Deals reduce dependence on China, supporting strategic autonomy.
  Eg. The EFTA–India TEPA (2024) enhances growth in generic pharmaceuticals while blocking exclusive data rules.

India’s FTAs and BTAs are key to securing global market access, integrating into global value chains, and attracting foreign investment. With layered safeguards like TRQs, sectoral exclusions, and stakeholder reviews, India can pursue growth and global integration while protecting vulnerable domestic sectors in an evolving trade landscape.

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