India's FTA SELECT MARK: Why exports don't keep up with ambitions

Copyright © HT Digital Streams Limit all rights reserved. India’s overall trade export of commodities in FY25 has remained almost flat, but the trend varied over India’s FTA partners. (Pixabay) Summary India has issued a record number of origin certificates under free trade agreements in FY25, but shipping to key markets did not rise in tandem. Policymakers reworked India’s export strategy to turn paperwork into real trading profits and exporters of the pillow from the US tariff shocks. New -Delhi: The government is setting up a calibrated strategy to increase shipping to key trading partners after noticing that the export did not sustain with intent. Although Indian exporters a record of 721,000 origin certificates in 2024-25, higher than 685,000 in FY24, according to the government’s data, exports of the most important markets have dropped. A certificate of origin is critical to exporters as it verifies goods to countries with which India has a free trade agreement (FTA), which enables access to lower rates. However, trade experts believe that more Koos does not guarantee higher exports, as factors such as competitiveness, non-tariff barriers and demand conditions play a greater role. The US steep rates have also forced policy makers to review India’s export promotion strategy to focus on FTA partners and create a pillow against possible losses of conventional markets. At 50%, India faces the highest rates among US trading partners, which jeopardizes India’s $ 86.5 billion value. To reduce the impact, the government is planning closer involvement in key trading partners, exporcation programs for exporters, and a sharper focus on solving procedural barriers that prevent shipping among the FTAs ​​of preference, three officials involved in the process said on condition of anonymity. “Our goal is to make sure that every certificate of origin issued under an FTA is translated into the actual trade. We are working on a comprehensive approach to increase exports to these markets in the coming years,” one of them said. The second official said the government set a target to double exports to India’s FTA partners and work on various fronts to make the export of goods seamless. A provisional assessment by the Department of Trade showed significant export potential at all FTA partners in key sectors such as textiles, jewelery and jewelry, pharmaceutical products, leather, agricultural goods, marine products, chemicals and plastic, the officials said. “Dedicated officers will be deployed in missions to identify market opportunities for different categories of products and facilitate exporters to realize the benefits of COOs with FTA partners,” the third official said. “The new strategy will also include the review of sectoral bottlenecks and the market access issues are more actively pursuing partner countries, especially where non-tariff barriers still make India’s advantage blunt,” this official added. The ministries of trade and foreign affairs did not respond to email questions. The Asean block (Asian Nations) was a trade in most of the origin certificates issued to Indian exporters in FY25-179,000, higher than 165,000 in FY24. But exports from India to ASEAN in FY25 fell 5.5% to $ 38.96 billion, it appears that trading in trade. While the overall export of merchandise in FY25 was almost flat at $ 433.56 billion, it rose only 0.11% from $ 433.09 billion in FY24, but the trend ranged over India’s FTA partners. Exports to the UAE rose 2.9% to $ 36.64 billion, and to Australia by 8% to $ 8.58 billion, corresponding to an increase in certificates or origin acquired for these countries – 122,000 of 98,000 for the UAE, and 77,231 out of 64,864 for Australia. However, shipping to South Korea fell 9.3% to $ 5.82 billion, and Mauritius by 13.1% to $ 676.34 million. “We are currently seeing a mismatch, as the Ministry of Trade largely relies on data from importing countries. The question is: Why would exporters apply for COOs and don’t actually use it?”, Says Ajay Sahai, director -general of the Federation of Indian Export Organizations. “In our discussions with the ministry, we agree that India does not use the FTAs ​​as effectively as partner countries have. The goal of doubling exports with FTA partners will certainly help increase the trade,” Sahai said. In general, India’s exports of merchandise in August dropped to $ 35.10 billion from $ 37.24 billion in July “FTAs offer the gate, but exporters need the right product strength, provision for supply chain and policy support to fully utilize them,” said Ajay Srivastava, co-founder of the thinking tanking. Trading Service Officer added. India’s global trade connects India’s negotiations with countries under different FTAs, comprehensive economic partnership agreements (CEPA), and other trading transactions are at different stages. Conversations with a US delegation for a very expected bilateral trade agreement amid tariff prints resumed on September 16 in New -Delhi after completing five rounds of discussions. In July, India and the UK signed a landmark free trade agreement that ended years of protracted negotiations. The 13th round of talks with the European Union for an FTA was held on September 8-12 and will resume on October 6-10, and shows on September 16’s ministry data. The 11th round of negotiations for an Asean trade in goods is also scheduled for October 6-10 and is expected to conclude by the end of the year. India-Australia CEPA discussions have completed 11 formal rounds, with the youngest held in August. The third round of talks for an India New Zealand FTA continues, from September 15-19. Negotiations for an economic and technology collaboration agreement with Sri Lanka completed its 14th round in July 2024. India also signed South Asian free trade agreements with Nepal, Sri Lanka, Bangladesh, Bhutan, the Maldives and Afghanistan, the India-Nepal Treaty of Trade, and the India-Bhutan Agreement on Trade, Trade and Transite. India’s trade transaction with Pakistan was suspended in August 2019 after the Pulwama terror attack. Recent agreements include the India-Uae CEPA, the India-Australian Economic Cooperation and Trade Agreement, and the India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEA). Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Trade Read Next Story