18 FTAs in place, now India has to deliver exports

As India navigates the complexities of global commerce, the focus is shifting from merely expanding the number of free trade agreements (FTAs) to maximizing the benefits of existing ones. Despite having inked over 18 FTAs, recent analyses suggest that the country must prioritize translating these agreements into substantial export growth, especially in sectors like electronics, engineering, and textiles. With global trade facing headwinds such as protectionism and fluctuating demand, understanding how these dynamics impact India’s export trajectory is crucial for policymakers and businesses alike. This article explores the current trade environment, challenges posed by major markets, and strategic imperatives for India’s export sector in the near future.

Reevaluating india’s Trade Strategy Amid Global Challenges

While india has actively pursued trade liberalization through numerous ftas, the Global Trade Research Initiative (GTRI) emphasizes a strategic pivot. Instead of continuing to sign new agreements, the emphasis should be on ensuring that existing FTAs effectively boost export volumes and values.In the fiscal year 2025, India’s total exports reached approximately USD 825 billion, with projections for 2026 indicating a modest increase to around USD 850 billion.This stagnation reflects a tough global trade climate marked by subdued international demand and rising protectionist policies, which particularly affect merchandise exports. Though, services exports are expected to exceed USD 400 billion, serving as a critical pillar supporting overall trade performance.

Impact of Protectionism and trade Barriers in Key Markets

The global trade environment is increasingly shaped by protectionist measures, with the United States and the European Union presenting significant challenges for Indian exporters. Under the previous administration of President Donald Trump, the U.S. imposed steep tariffs that bypassed World Trade Association (WTO) norms. Between May and November 2025, India’s exports to the U.S. declined by nearly 21% due to a 50% tariff regime. The continuation of an additional 25% penalty tariff linked to India’s purchase of Russian oil threatens further erosion of exports unless a trade agreement is reached or tariffs are rolled back.

Simultaneously occurring, the European Union is set to implement the Carbon Border Adjustment Mechanism (CBAM) starting January 1, 2026. This carbon tax on imports has already caused a roughly 24% drop in India’s steel exports to the EU due to compliance and reporting requirements. From 2027, importers will be required to pay for carbon certificates, effectively increasing the cost of Indian goods in European markets. These developments underscore the need for Indian exporters to adapt to evolving regulatory landscapes.

signs of Export Resilience and Diversification

Despite these obstacles, there are encouraging signs of resilience in India’s export sector. While shipments to the U.S. have declined,exports to other global markets have grown by approximately 5.5%, indicating a gradual diversification of trade partners. This trend highlights the importance of expanding into emerging markets and reducing overreliance on traditional destinations.Strengthening ties with regions such as Southeast Asia, Africa, and Latin America could provide new avenues for growth amid global uncertainties.

Domestic Imperatives for Strengthening export Competitiveness

Given the limited influence India holds over global geopolitical shifts,the GTRI report stresses that the country’s export growth will increasingly depend on internal factors. Enhancing product quality, moving up the value chain, and reducing production costs are critical strategies for sustaining and expanding export performance. Investments in technology, innovation, and infrastructure will be vital to achieving these goals. The report concludes that in 2026, india’s trade success will hinge more on effective domestic execution than on external opportunities.

Crucial facts: Key Points to remember

• India has signed over 18 free trade agreements (FTAs) to date.
• Total exports reached approximately USD 825 billion in fiscal year 2025.
• Projected exports for fiscal year 2026 are around USD 850 billion, showing marginal growth.
• Services exports are expected to exceed USD 400 billion in FY26.
• India’s exports to the United States fell by about 21% between May and November 2025 due to a 50% tariff regime.
• The European Union’s Carbon Border Adjustment Mechanism (CBAM) will start in January 2026, impacting Indian steel exports.
• India’s steel exports to the EU have already declined by roughly 24% due to CBAM compliance requirements.
• Exports to markets other than the U.S. increased by approximately 5.5% in 2025.
• Key sectors for export growth include electronics, engineering, and textiles.
• domestic improvements in product quality, value addition, and cost efficiency are essential for future export growth.

Frequently Asked Questions

Q1: How many free trade agreements has India signed so far? A1: India has signed more than 18 FTAs to date.

Q2: What is the expected value of India’s exports in fiscal year 2026? A2: Exports are projected to reach around USD 850 billion in FY26.

Q3: Which sectors are highlighted for export growth in India? A3: The sectors include electronics, engineering, and textiles.

Q4: What impact has the U.S. tariff regime had on India’s exports? A4: India’s exports to the U.S. dropped by about 21% between may and November 2025 due to a 50% tariff.

Q5: What is the Carbon Border Adjustment Mechanism (CBAM) and how does it affect India? A5: CBAM is an EU carbon tax on imports starting in 2026, which has already caused a 24% decline in India’s steel exports to the EU due to compliance costs.