India's Trade Policy
India's Trade Agreements
The free trade agreements India has signed, from Asia to the UAE, Australia, the EFTA countries and the UK, and what these deals try to achieve.
A free trade agreement, or FTA, cuts tariffs and other barriers between partner countries. India has signed a growing number of them.
Early agreements
- South Asian Free Trade Area (SAFTA), in force from 2006, with South Asian neighbours.
- ASEAN-India Trade in Goods Agreement, from 2010, with ten Southeast Asian countries.
- Deals with Singapore (2005), South Korea (2010), Japan (2011) and Malaysia (2011).
Many Indian exporters felt these early deals helped partner countries more than India, as India’s imports from them grew faster than its exports. This made India cautious for several years.
A new wave of deals
From 2022, India signed a new round of agreements:
- India-UAE CEPA (Comprehensive Economic Partnership Agreement), in force from May 2022.
- India-Australia ECTA, from December 2022.
- India-EFTA TEPA, with Switzerland, Norway, Iceland and Liechtenstein, signed in 2024 and in force from October 2025. It included a commitment by EFTA countries to aim for 100 billion dollars of investment in India over 15 years, an unusual feature.
- India-UK Comprehensive Economic and Trade Agreement, signed in July 2025.
India also held long negotiations with the European Union, one of its largest trading partners.
What India seeks
- Lower tariffs for labour-intensive exports such as garments, leather, footwear and gems.
- Easier movement for professionals and services.
- Investment and technology.
What partners seek
- Lower Indian tariffs on goods such as cars, wine, whisky, dairy and machinery.
- Stronger intellectual property protections.
- Access to government procurement.
The trade-off
FTAs bring cheaper imports and new export markets, but they can hurt sensitive sectors. India often protects agriculture and dairy in its deals.
A garment maker in Tiruppur pays tariffs to sell in some rich markets while competitors in Bangladesh or Vietnam pay none. When an FTA removes the tariff, her shirts become more competitive, and she wins new orders.
FTAs usually phase out tariffs over years and exclude sensitive products. Rules of origin, standards and paperwork still apply.
- India has FTAs with South Asia, ASEAN, Japan, Korea and others.
- Early deals made India cautious, as imports grew faster than exports.
- New deals with the UAE, Australia, EFTA and the UK came from 2022.
- India seeks access for labour-intensive exports while protecting farming and dairy.
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