New FTAs open big export gains across key sectors
A cluster of eight recently concluded free trade agreements (FTAs) is expected to open substantial duty-free market access for Indian exporters, with electronics, agriculture, and gems and jewellery flagged as the biggest gainers.
India's share in total EU and UK imports has historically been low, and the new pacts are expected to improve competitiveness against countries that already enjoy preferential access to these markets.
The agreements are projected to diversify India's export markets and reduce over-dependence on a small set of trading partners, improving resilience against demand shocks in any single market.
Sector bodies for gems and jewellery, electronics, and agri-processing have flagged near-term gains from elimination or sharp reduction of tariff lines under the new agreements.
Free Trade Agreements vs CEPA vs CECA — Typology
An FTA is a treaty between two or more countries to reduce or eliminate tariffs and non-tariff barriers on goods; a Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA) goes further, covering services, investment, intellectual property, and government procurement in addition to goods. India has increasingly used the "comprehensive" format for its recent deals.
Key Details
- India–UAE CEPA (May 2022) was India's first CEPA in nearly a decade, followed by India–Australia ECTA (Economic Cooperation and Trade Agreement, December 2022) and India–EFTA TEPA (Trade and Economic Partnership Agreement, signed March 2024, in force October 2025 — covering Iceland, Liechtenstein, Norway, Switzerland).
- The India–UK Comprehensive Economic and Trade Agreement (CETA) was signed in July 2025, and the India–EU FTA negotiations concluded in January 2026 — together these form part of the recent cluster of agreements.
- Under GATT Article XXIV of the WTO framework, FTAs and customs unions are a permitted exception to the Most Favoured Nation (MFN) principle, provided they eliminate duties on "substantially all trade" between parties without raising barriers against outside countries.
- India's cumulative trade agreements now cover a much larger share of India's total exports than they did two decades ago, reflecting the shift from a protectionist to an FTA-driven trade policy since the early 2000s.
The eight agreements referenced in the news extend the same CEPA/FTA architecture to new markets (UK, EU, Oman, New Zealand), each replacing MFN tariff rates with negotiated preferential rates that must satisfy Article XXIV's "substantially all trade" test.
Rules of Origin and CAROTAR, 2020
Rules of Origin (RoO) are the criteria used to determine the "economic nationality" of a traded product for the purpose of granting preferential tariff treatment under an FTA — without them, third countries could route goods through an FTA partner to claim duty benefits (trade deflection). India operationalised RoO enforcement through the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR).
Key Details
- CAROTAR, 2020 was notified on 21 August 2020 and came into force on 21 September 2020, administered by the Central Board of Indirect Taxes and Customs (CBIC).
- Importers must possess and produce a Certificate of Origin (recently being replaced by the broader "Proof of Origin" terminology in amendments effective March 2025) and specific origin-related information to claim concessional duty at the Bill of Entry stage.
- RoO typically use tests such as "wholly obtained," "substantial transformation," or a minimum value-addition threshold (commonly 35-40% under Indian FTAs) to determine origin.
- Sensitive/exclusion lists in each FTA (e.g., agriculture-sensitive lines historically excluded from India-ASEAN FTA) show how RoO and tariff schedules are negotiated product-by-product, not as a blanket duty removal.
Exporters availing duty-free access under the new FTAs must meet each agreement's specific Rules of Origin to prevent misuse, making RoO compliance central to actually realising the export gains being discussed.
MFN Tariffs, Preferential Access, and Export Competitiveness
Under WTO MFN rules, a country must generally offer the same tariff treatment to all trading partners; FTAs create a legal exception allowing preferential (lower or zero) tariffs exclusively for the treaty partner. When India's competitors already have FTAs with a market (e.g., Vietnam or Bangladesh with the EU under GSP) while India does not, Indian goods are relatively disadvantaged — a gap the new FTAs are intended to close.
Key Details
- India's gems and jewellery exports have historically faced MFN duties in the 2-4% range in the EU market; FTA-linked elimination is expected to make Indian jewellery cost-competitive with duty-free (or GSP-eligible) competitors.
- The India–UK CETA provides for the overwhelming majority of India's exports to the UK to enter at zero duty, a benchmark comparison point against the India-UAE CEPA (2022), which eliminated duties on over 90% of tariff lines.
- Agriculture and processed food are typically treated as "sensitive" categories in Indian FTAs due to farmer livelihood concerns, so the extent of tariff elimination in this sector varies significantly by agreement compared to industrial goods like electronics.
The article's framing — that India's import share in the EU and UK has been "relatively low" — reflects the tariff disadvantage Indian exporters faced pre-FTA relative to competitors with existing preferential access, which the new agreements are designed to correct.
- Eight recent/recently concluded Indian FTAs referenced in current reporting: UAE CEPA (2022), Australia ECTA (2022), EFTA TEPA (signed 2024, in force October 2025), UK CETA (signed July 2025), Oman CEPA (December 2025), New Zealand FTA (announced December 2025), and the EU FTA (concluded January 2026).
- CAROTAR, 2020: notified 21 August 2020, in force from 21 September 2020, administered by CBIC.
- GATT Article XXIV is the WTO provision permitting FTAs/customs unions as an exception to the MFN principle.
- Flagged high-gain sectors: electronics, agriculture and processed food, and gems and jewellery.
- Sector expectation under UK CETA: gems and jewellery exports to the UK targeted to expand substantially within a multi-year horizon following duty elimination. [Unverified — precise multi-year target figure]