A leading economic think tank has issued a critical report urging the Indian government to pivot its strategy on Free Trade Agreements (FTAs). The Global Trade Research Initiative (GTRI) argues that with more than 18 FTAs already signed, the focus must now shift decisively from negotiation to execution, ensuring these deals deliver concrete export gains for Indian businesses.
From Signing to Scoring: The Implementation Imperative
The report, titled 'India's FTAs: The Road Ahead', highlights a significant gap between policy intent and ground reality. While India has been proactive in securing trade deals with partners like the UAE, Australia, and the European Free Trade Association (EFTA), the real test lies in their effective implementation. The GTRI cautions that Indian exporters often struggle to utilize FTA benefits due to complex rules of origin and a lack of awareness.
This call for a strategic shift comes at a crucial juncture. India is currently engaged in or planning negotiations with several major economies, including the United Kingdom, the European Union, and Oman. The think tank's core message is clear: future negotiations must be underpinned by a robust framework that ensures Indian industries can practically access the concessions won at the bargaining table.
A Challenging Global Trade Landscape in 2026
The urgency for this pivot is amplified by a sobering forecast for the global trading environment. The GTRI report points to a potentially tough trade outlook in 2026, driven by several converging factors. A key concern is the possible return of Donald Trump to the US presidency, which could usher in a new wave of protectionist policies and trade wars, disrupting global supply chains.
Furthermore, the report anticipates the full enforcement of the European Union's Carbon Border Adjustment Mechanism (CBAM) by 2026. This policy will impose carbon taxes on imports of carbon-intensive goods like steel, aluminium, and cement, posing a significant challenge for Indian exporters in these sectors. Navigating these non-tariff barriers will require strategic planning and adaptation from Indian industry.
Key Recommendations for Maximizing FTA Benefits
To transform FTAs from paper agreements into engines of export growth, the GTRI outlines several actionable recommendations for the government:
- Enhanced Outreach and Simplification: Launch comprehensive awareness campaigns for exporters, especially MSMEs, and simplify the certification processes for rules of origin to reduce compliance burdens.
- Sector-Specific Strategies: Develop tailored strategies for key sectors where India has competitive advantages, ensuring FTA terms are optimized for industries like pharmaceuticals, textiles, and IT services.
- Monitoring and Support System: Establish a dedicated mechanism to monitor the utilization of FTAs, address operational hurdles faced by exporters in real-time, and provide handholding support.
- Future-Proofing Negotiations: In ongoing talks with the UK, EU, and others, proactively address emerging issues like carbon taxes and digital trade to secure favourable terms for the long term.
The underlying data underscores the importance of this mission. Merchandise exports have remained stagnant at approximately $430-450 billion over the last two fiscal years. A strategic and well-implemented FTA policy is viewed as a vital lever to break this plateau and propel India towards its ambitious export targets.
In conclusion, the GTRI report serves as a timely reminder that the hard work begins after the signing ceremony. For India to thrive in an increasingly complex and competitive global market, it must master the art of implementing its trade agreements, ensuring that the promise of FTAs translates into palpable prosperity for its export economy.
