Introduction
In recent years, India has recalibrated its trade and investment strategy to prioritize Free Trade Agreements (FTAs) that align with its long-term manufacturing and export goals. These FTAs are not just about reducing tariffs they’re designed to enhance market access, ease regulatory bottlenecks and encourage foreign manufacturers to view India as a global production base.
At the International Advisory Council (IAC), we help manufacturers and investment promotion agencies understand how India’s evolving FTA landscape can amplify their India market entry support, supply chain resilience and export potential.
India’s Shift in FTA Strategy: From Defensive to Assertive
India earlier maintained a cautious stance on trade agreements. Today, it is actively:
- Negotiating and finalizing FTAs with key economic partners
- Prioritizing market access for Indian goods and services
- Securing provisions on investor protection and IP rights
- Positioning India as a manufacturing and sourcing hub under global value chains
This strategic shift is driven by a desire to make Indian production globally competitive and to attract foreign direct investment (FDI) through more open, predictable markets.
FTAs Fueling Manufacturing Expansion
1. India–UAE CEPA (Comprehensive Economic Partnership Agreement)
- Eliminates duties on 90% of goods
- Boosts exports in textiles, gems, auto parts, electronics
- Enables duty-free access to Middle Eastern and African markets
2. India–Australia ECTA (Economic Cooperation and Trade Agreement)
- Immediate duty cuts on 85% of Indian exports
- Encourages Australian investment in India’s clean energy and minerals sectors
- Opens space for joint ventures in agri-tech and machinery
3. Upcoming India–UK and India–EU FTAs
- Will target automotive, medtech, chemicals, digital goods
- Expected to align regulatory standards and ease cross-border investment promotion
- Focus on green trade, ESG compliance and digital economy norms
What This Means for Global Manufacturers
Manufacturers based in treaty-partner countries can:
- Expand production in India and re-export duty-free to FTA markets
- Source raw materials or components from India at competitive rates
- Set up India-based joint ventures to benefit from local policy support and international market access
- Reduce costs through customs simplification and tariff exemptions
- Access India’s rapidly growing domestic and export markets under preferential trade rules
This strengthens India’s positioning in China + 1 diversification strategies.
Case Study: European Appliance Manufacturer’s India Strategy
A European mid-size appliance company partnered with IAC to enter India in anticipation of the India–EU FTA. IAC:
- Identified a production site in Gujarat with PLI scheme support
- Facilitated dialogue with India’s trade ministry and state IPA
- Supported B2B matchmaking India with regional distributors and suppliers
- Developed a plan to re-export to Africa and the Middle East under the India–UAE CEPA
Result: Duty-free access, accelerated production and lower go-to-market costs.
IAC’s Role in Leveraging FTAs for Manufacturing Expansion
At IAC, we:
- Guide companies on leveraging tariff benefits and non-tariff harmonization
- Help interpret FTA provisions for in-country representation India and joint manufacturing models
- Connect with local IPAs for site selection and tax planning
- Support PR for international companies in India to highlight FTA-linked investments
- Assist EDBs in building cross-border industrial collaboration with Indian states
Key Sectors Poised to Benefit from India’s FTAs
- Auto components and EVs
- Pharmaceuticals and medical devices
- Textiles and garments
- Engineering goods and capital machinery
- Electronics and telecom equipment
- Processed food and agro-products
Conclusion
India’s new FTA strategy is not just about trade it’s a calculated bet on transforming the country into a global manufacturing powerhouse. For foreign manufacturers, these agreements offer preferential access, operational efficiency and policy backing.
At IAC, we translate these policy shifts into actionable entry strategies that position you for long-term growth in India and beyond.