India negotiating FTAs with 8-9 more blocs, aims to cover 75% of global trade: Piyush Goyal
The Ministry of Commerce and Industry confirmed that India is currently negotiating Free Trade Agreements (FTAs) with 8-9 more blocs and countries, including the United States, the Gulf Cooperation Council (GCC), Peru, Chile, Israel, and an upgrade to the existing Australia agreement.
India's nine concluded FTAs already give preferential access to 38 economies with a combined GDP of nearly $70 trillion, covering roughly two-thirds of global trade and about 70% of global GDP.
The stated target is to expand coverage to approximately 75% of global trade once the pipeline of ongoing negotiations concludes.
Officials highlighted growing interest from foreign investors in high-value sectors such as data centres and artificial intelligence infrastructure, linking trade liberalisation to investment inflows.
India's exports touched a record $863.1 billion in FY26, partly attributed to market access gained through recent FTAs with the UAE, UK, and Australia.
Free Trade Agreements: Types and Structure
An FTA is a treaty between two or more countries or blocs that reduces or eliminates tariffs and non-tariff barriers on a substantial share of bilateral trade in goods and, in wider versions, services and investment. India uses several nomenclatures for what are functionally FTAs: CEPA (Comprehensive Economic Partnership Agreement — covers goods, services, investment, IPR), CECA (Comprehensive Economic Cooperation Agreement), and TEPA (Trade and Economic Partnership Agreement, used with EFTA). All are notified to the WTO under GATT Article XXIV (goods) and GATS Article V (services), which require substantial coverage of trade and a reasonable implementation timeframe as conditions for an exception to the Most Favoured Nation (MFN) principle.
Key Details
- India's in-force FTAs (as of 2026) include ASEAN (10 countries), Japan, South Korea, Mauritius (CECPA), UAE (CEPA, 2022), Australia (ECTA, December 2022), and the four-nation EFTA bloc — Iceland, Liechtenstein, Norway, Switzerland — under TEPA, signed March 2024, in force October 2025.
- Recently concluded but not yet fully in force: India-UK CETA (signed July 2025), India-Oman CEPA (December 2025), India-New Zealand FTA (announced December 2025), and India-EU FTA (announced January 2026, impacting roughly 25% of global GDP).
- Agreements currently under negotiation include the US (framework/interim stage), the GCC (formally launched February 2026), Peru, Chile, Israel, and an Australia CECA upgrade.
The "8-9 more blocs" cited in the news refers to this pipeline of under-negotiation deals; closing even a few of these (especially the US and GCC) would meaningfully push India's global trade coverage from roughly two-thirds toward the 75% target.
Rules of Origin and Trade Diversion Risk
Rules of Origin (RoO) are the criteria used to determine the "economic nationality" of a traded good, deciding whether it qualifies for preferential tariff treatment under an FTA. They typically require a minimum percentage of local value addition or a change in tariff heading (CTH) during manufacturing in the exporting country.
Key Details
- India tightened RoO enforcement through the CAROTAR 2020 (Customs Administration of Rules of Origin under Trade Agreements) Rules, introduced after concerns that non-FTA-partner goods (particularly from China) were being routed through FTA partners like ASEAN members to claim undue tariff concessions.
- Comparative benchmark: the India-UAE CEPA (2022) uses a Regional Value Content (RVC) threshold of around 40% combined with a change in tariff classification for many product lines — a template India has sought to replicate in newer negotiations to prevent "trade deflection."
As India signs a denser web of FTAs simultaneously, robust and consistent RoO design across agreements becomes critical to prevent one partner's low-tariff goods from illegitimately entering India via another partner's preferential route.
Global Value Chains (GVC) and FDI Policy
A Global Value Chain refers to the cross-border sequence of activities — design, production, assembly, marketing — through which a good or service is created, with different stages performed in different countries based on comparative advantage. India's FTA push is explicitly framed as a GVC integration strategy: deeper trade agreements reduce tariff and regulatory friction, making India a more attractive node for firms diversifying supply chains away from single-country concentration (the "China+1" strategy).
Key Details
- The Production Linked Incentive (PLI) scheme (launched 2020-21 across 14 sectors) complements FTA market access by incentivising domestic manufacturing for export, having attracted about $22.2 billion in investment and generated roughly $208 billion in incremental production by 2026.
- FDI policy linkage: India permits 100% FDI under the automatic route in most manufacturing sectors, a liberalisation seen as necessary to convert FTA-driven market access into actual investment inflows.
The Minister's reference to investment interest in data centres and AI reflects the broader logic that FTAs are no longer just about goods tariffs — they now serve as signals of policy stability and market access that attract capital into strategic, high-value GVC segments.
- India's existing 9 FTAs cover 38 economies with a combined GDP of nearly $70 trillion (~70% of global GDP, roughly two-thirds of global trade).
- Target: expand coverage to approximately 75% of global trade via 8-9 additional agreements under negotiation.
- India-EFTA TEPA: signed March 10, 2024; entered into force October 1, 2025.
- India-EU FTA: announced January 27, 2026; covers about 25% of global GDP and one-third of world population.
- India's FY26 merchandise exports: record $863.1 billion, with ASEAN ($38.42 bn), UAE ($37.36 bn), SAFTA ($25.77 bn), and UK ($13.44 bn) among the top FTA-partner export destinations.
- PLI scheme (14 sectors, launched 2020-21): ~$22.2 billion in investment, ~$208 billion incremental production, ~1.26 million jobs created.