India Should Focus On FTA Implementation, Utilisation By Exporters: Experts
India has so far implemented several trade pacts, including those with Singapore, Japan, Korea, the UAE, Australia, ASEAN, and the EFTA bloc. Besides, it has also finalised such pacts with Oman, New Zealand, the European Union, and the UK
New Delhi: Ahead of several implementations of the free trade agreement (FTA) with other countries, experts have said that India’s next priority is to help exporters use these pacts, as the gap between the negotiated and used market access remains the country's weakest link. “The immediate priority should be to ensure that these negotiated benefits translate into actual claims at the border,” they said.
“Historically, India’s FTA utilisation has hovered around 25 per cent, compared with 70-80 per cent in developed economies, and closing this gap is now the single highest-leverage trade policy reform available,” they pointed out.
India has so far implemented several trade pacts, including those with Singapore, Japan, Korea, the UAE, Australia, ASEAN, and the EFTA bloc. Besides, it has also finalised such pacts with Oman, New Zealand, the European Union, and the UK.
“Hence, India's next FTA priority should be practical implementation, helping exporters use the agreements, defend against new trade barriers, and convert market access into sustained export growth,” said Gulzar Didwania, Partner, Deloitte India, adding that the immediate priority should now be to ensure that these negotiated benefits translate into actual claims at the border.
“The policy narrative must now move decisively from FTA signing to FTA utilisation. India has already secured significant market-access outcomes, including duty-free access for 99 per cent of India's exports to the UK under CETA and market access for more than 99 per cent of India's exports by trade value under the India-EU FTA,” he added.
Didwania is of the view that FTAs can help cushion the impact of geopolitical uncertainties on India's merchandise exports by creating alternative trade routes and improving access to multiple strategic markets. “India's best approach would be to diversify export markets and products, deepen integration with global value chains, and strengthen domestic manufacturing competitiveness to reduce external vulnerabilities, he said.
Rudra Kumar Pandey, Partner, Shardul Amarchand Mangaldas & Co, also stated that the most immediate priority is FTA utilisation. “The gap between market access negotiated and market access used remains India's weakest link. The utilisation rates under the Australia ECTA have reached 84 per cent. But awareness among MSMEs remains low, and certification infrastructure is underdeveloped across most other agreements. Every firm with export potential must understand the preferential access available to it and have the documentation and compliance support to use it,” Pandey added.
Pandey further said that the sectors where India has negotiated the deepest tariff concessions - textiles, leather, engineering goods, pharmaceuticals, and marine products - need targeted PLI-type support to build the production capacity and quality standards required to exploit that access fully. “India must also accelerate standards alignment and regulatory upgradation to meet the compliance requirements of partner markets,” he said.
