India's Trade Agreements: Past, Present & Future

From the Earliest Agreements to Mega Global Plans in the Future

Between 2005 and 2015, India concluded a series of major bilateral and regional trade agreements. The intention was to further India's integration into global value chains, increase access to foreign capital and cutting-edge technology, broaden services exports, and construct strategic geopolitical partnerships. 

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INDIA-SINGAPORE CECA (COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT) (2005)

India's initial major CECA was signed with Singapore on 29 June 2005, and its operation commenced on 1 August 2005. As an economic and logistical hub in Asia, Singapore was considered a strategic gateway for Indian investments and exports.

The accord covered the removal of tariffs on more than 80% of goods traded between them, opening up crucial sectors of services like finance, telecom, and professional services, and mutual acceptance of professional qualifications. Singaporean business firms also developed more confidence to invest in India, which translated into massive infrastructure projects like port development and airport upgrades in Delhi and Mumbai.

After the pact, Singapore became one of the leading sources of FDI in India, and financial institutions such as DBS Bank increased their presence in Indian retail banking.

The CECA also enhanced cross-border travel by easing visa regulations, making it easier for business as well as tourism.

INDIA-SOUTH KOREA CEPA (COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT) (2010)

 India and South Korea signed the Comprehensive Economic Partnership Agreement (CEPA) on 7 August 2009 in Seoul which became effective from 1 January 2010. It opened a new era of economic cooperation between them. The deal sought to eliminate or lower import tariffs on a large number of products in the coming decade South Korea agreed to remove tariffs on 90% of Indian products, while India agreed to remove tariffs on 85% of Korean products. The CEPA also generated opportunities for trade and investment in services.

One of the major spots was the permission for the temporary movement of 163 groups of Indian professionals to South Korea. South Korean companies soon realized India's expanding consumer population and increasing GDP, which rendered it a lucrative marketplace. CEPA had a marked effect, as two-way trade exceeded $20.6 billion in 2011, an almost 70% boost in only two years. Both nations have since been reviewing and refining the accord to further boost economic relations.

INDIA-MALAYSIA CECA (2011)

India entered into a CECA with Malaysia on 18 February 2011, which was effective from 1 July 2011. The pact was consistent with India's larger strategy of deeper integration with ASEAN economies.

The CECA imposed tariff cuts on the goods traded between the two countries by 2019. The trade in services was also liberalised in areas such as banking, construction, education, and healthcare.

Furthermore, the agreement had provisions to increase customs cooperation and simplify trade facilitation.

Indian pharmaceutical exports to Malaysia increased, and the petroleum refining and palm oil sectors improved bilateral cooperation. The pact also promoted cooperation between small and medium-sized enterprises (SMEs) of both nations.

INDIA–JAPAN CEPA (2011)

The India–Japan CEPA, signed on 16 February 2011 and came into force on 1 August 2011, was among the most detailed bilateral trade agreements India has ever signed.

Japan pledged to eliminate tariffs on 94% of products within 10 years, and India promised to lower duties on essential sectors like auto components, medical equipment, and machine tools. Services trade in engineering, IT, construction, and consultancy was also liberalised in the agreement.

The CEPA formed the cornerstone of the "Special Strategic and Global Partnership" between the two countries.

ASEAN–INDIA FTA (2010, 2015)

India's interaction with Southeast Asia was strengthened through the ASEAN–India Free Trade Agreement, which covered a goods pact in August 2009 and went into effect from January 2010. Pacts on services and investment were signed in November 2014 and entered into force in July 2015.

The FTA lowered tariffs on more than 90% of products and opened up major services sectors like IT, tourism, business services, and healthcare. It also contained investment protection measures and dispute resolution mechanisms.

The pact sharply increased bilateral trade, which rose to US$79 billion by 2011, with more than 20% annual growth. Indian firms, especially in the auto, electronics, pharma, and textile sectors, started getting involved in ASEAN value chains. Nevertheless, fear of trade imbalance has led India to request an examination of the agreement.

SOUTH ASIAN FREE TRADE AREA (SAFTA) (2006)

SAFTA entered into force on 1 January 2006, though it was signed in 2004. It aimed to enhance economic integration between SAARC nations by progressively reducing tariffs on intra-regional trade. In SAFTA, India committed to reducing tariffs progressively, eliminating trade barriers, and encouraging fair competition in the region.

SAFTA was also in support of special trade advantages to least-developed countries such as Nepal, Bhutan, and Bangladesh. SAFTA was to build regional linkage, enhance market access, and ensure economic growth in South Asia for India.

INDIA-CHILE PTA (2006)

India signed a Preferential Trade Agreement (PTA) with Chile on 8 March 2006, which entered into force in September 2007. This was India's early foray into Latin America.

The PTA initially covered tariff concessions on 178 Indian and 296 Chilean goods, and its ambit was widened in 2017. Major sectors covered were copper, wine, chemicals, pharmaceuticals, auto components, and textiles.

By 2014, two-way trade had increased to US$2.6 billion, with Chile providing India entry into a resource-rich and politically stable Latin American market.

The agreement was indicative of India's increasing desire to diversify its trade from traditional partners.

INDIA-MERCOSUR PTA (MERCADO COMUN DEL SUR (SPANISH) / SOUTHERN COMMON MARKET) (2009)

The India–MERCOSUR PTA was inked in January 2004 but was implemented only in June 2009. MERCOSUR comprises Brazil, Argentina, Uruguay, and Paraguay, and the PTA was intended to enhance South–South cooperation. There were 450 tariff lines from both sides under the agreement. India shipped pharmaceuticals, chemicals, textiles, and engineering goods and imported agricultural and industrial products from MERCOSUR.

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Bilateral trade had hit US$10 billion by 2015, with Brazil and Argentina becoming major partners. Negotiations for widening the PTA into a full FTA or CEPA have been ongoing, with targets to increase product coverage by half and to improve two-way investments.

INDIA'S NEXT-GENERATION TRADE AGREEMENTS (2015-2025)

During the period 2015–2025, India embarked on a new era in its trade diplomacy by shifting the focus towards deeper, multi-faceted agreements that went far beyond conventional tariff easing. These were aimed at enhancing India's competitiveness in the world by connecting it to new emerging clusters in services, technology, and high-value manufacturing

INDIA-MAURITIUS CECPA

India–Mauritius Comprehensive Economic Cooperation and Partnership Agreement, effective from April 2021. Small in trade volume but geopolitically important, the agreement was intended to fortify historical links and situate Mauritius as a bridgehead for India's larger African engagement.

The CECPA granted tariff preferences for 310 Indian export products and 615 Mauritian exports. Importantly, it offered liberalisation in 11 sectors of services.

The agreement was crafted with a strategic view to facilitate the growth of a strong India–Africa trade and investment corridor, leveraging Mauritius's financial infrastructure, tax benefits, and regulatory setup. It encouraged Indian financial institutions, law firms, and pharma companies seeking to enter the African region.

INDIA-UAE CEPA

One of the most significant agreements of the time was the India–United Arab Emirates CEPA, inked on 18 February 2022 and operationalised with effect from 1 May 2022, which has contributed appreciably towards bilateral trade.

In the first year of operation, bilateral trade increased from USD 72.9 billion (Apr 2021–Mar 2022) to USD 84.5 billion (Apr 2022–Mar 2023), representing a 16% year-on-year growth. During the period of CEPA (May 2022–Mar 2023), trade increased from USD 67.5 billion to USD 76.9 billion, i.e., a 14% increase in annual growth.

Indian exports to the UAE were at a multi-year high, rising by 11.8% to USD 31.3 billion, while India's exports to the rest of the world grew by 4.8%. Imports from the UAE also increased substantially, reaching USD 53.2 billion, with non-oil imports up by 4.1%.

Some key industries to gain from CEPA are gems and jewellery, electrical equipment, automobiles, cosmetics, agricultural products, and chemicals, especially labour-intensive sectors.

The UAE exempted duties on 97.4% of its tariff lines (accounting for 99% of India's exports), while the duties on more than 80% of India's tariff lines (accounting for 90% of imports from the UAE) were waived by India.

Services trade also expanded, with India making commitments in 100 sub-sectors and the UAE making 111.

Preferential Certificates of Origin issued under CEPA increased rapidly, from only 415 in May 2022 to over 8,400 by March 2023, amounting to over 54,000 in the 11 months, demonstrating robust and increasing use. CEPA has thus become the main engine of trade, investment, and employment between the two countries.

INDIA-AUSTRALIA ECONOMIC COOPERATION AND TRADE AGREEMENT

ECTA, 2 April 2022, came into effect on 29 December 2022. This was India's first significant bilateral trade agreement with a developed economy in more than a decade and was of strategic importance for both energy security and high-value services trade.

The deal provided tariff-free entry for more than 96% of Indian exports and established a timeline for 100% access within 2026. The concessions were given in coal, rare earths, wine, and agri-products, while India received a significant fillip to textile, chemical, and engineering exports.

Liberalisation was also applied to 135 services sub-sectors, and special arrangements were made for STEM graduate visas and Working Holiday Maker programmes. Extra chapters on avoiding double taxation, mutual recognition of professional qualifications, and sanitary and phytosanitary (SPS) alignment helped reduce trade flows.

The ECTA also set the stage for a future full-fledged CECA and bolstered cooperation in green energy minerals, vocational education, and innovation ecosystems.

INDIA-EFTA TEPA (EUROPEAN FREE TRADE ASSOCIATION - TRADE AND ECONOMIC PARTNERSHIP AGREEMENT)

India–EFTA TEPA, concluded on 10 March 2024 with the European Free Trade Association (Switzerland, Norway, Iceland, Liechtenstein). This was set to be operational by September 2025 and was India's most sophisticated agreement with a European bloc to date.

EFTA nations pledged a US$100 billion investment in India during the next 15 years, generating more than 1 million jobs. The deal granted India duty-free entry for 99.6% of its exports, and in return, it offered EFTA preferential access on 82.7% of tariff lines.

TEPA far exceeded trade in goods. It was most useful in linking India with advanced-tech and precision engineering value chains. Swiss firms like ABB, Novartis, and Syngenta made major expansion announcements, and India acquired an important entry point into EU markets through Switzerland's services and financial infrastructure. The accord should enlarge the base trade of US$18.7 billion shortly.

LOOKING AHEAD (2025-2035) INDIA-EUROPEAN UNION BTIA

Concurrently, India is well into the 11th round of talks on the India–European Union BTIA (Broad-based Trade and Investment Agreement), targeting closure by late 2025. The EU is India's biggest trading partner and a primary source of high-tech climate-convergent capital.

The BTIA seeks to open up goods, services, and investment while also featuring regulatory convergence on IP, carbon taxation, customs digitalisation, and deforestation-linked sustainability clauses.

Once finalised, it is essential to increase green tech trade, facilitate service-sector mobility, and widely increase European investments in Indian industrial corridors.

INDIA-UNITED KINGDOM FTA

The just-concluded India–United Kingdom FTA, entered into in May 2025, is another major achievement. Post-Brexit, the UK has shifted its focus toward Indo-Pacific economies, and India provides a complementary and dynamic economy.

The pact guarantees tariff-free entry for 99% of Indian exports and more than 90% of UK imports and covers such important areas as digital trade, education services, data localisation, sustainability, and labour mobility.

It is expected to boost overall trade by £25 billion by 2040 while boosting the UK's GDP by £4.8 billion.

Indian students, professionals, and businesses operating in tech, fashion, and financial services will greatly benefit.

INDIA-NEW ZEALAND FTA

Yet another crucial negotiation is the India–New Zealand FTA, where negotiations restarted in March 2025 and are expected to wrap up by 2026. India wants market access for agri-food, dairy, education, and clean tech, while New Zealand aims for closer services cooperation and e-commerce connections. While today's bilateral trade is limited (~US$2 billion), the FTA has the potential to drive green tech partnerships and student exchange programmes.

INDIA-OMAN CEPA

Talks are also progressing on the India–Oman CEPA, which was initiated in November 2023. A part of India's Gulf economic strategy, the agreement is expected to boost trade in textiles, pharma, and agro-products as well as boost cooperation in logistics, energy, and port infrastructure. Oman's geographical location positions it as a good logistics and energy hub for India's outward trade and investment.

INDIA-CANADA CEPA

India's interaction with Canada has been more complicated. Negotiations on the India–Canada CEPA, initiated in March 2022, were suspended in late 2023 but are expected to restart by the end of 2025. The agreement would provide potential access to G7 markets for Indian agriculture, education, and clean energy firms and increase cooperation in climate-congruent investment and knowledge flows.

INDIA-ISRAEL FTA

Negotiations for an India–Israel FTA resumed early in 2025 in the Middle East. The deal is likely to be defence, cybersecurity, agritech, water management, and pharma-focused. With the robust innovation ecosystems in both nations, the FTA may open the gates for joint R&D collaboration and assist India to enhance its high-tech exports, particularly in semiconductors, AI, and agri-processing.

INDIA-GCC FTA

The much-awaited India–GCC FTA (with the Gulf Cooperation Council) is also making rapid progress. While a framework was initiated in 2004, significant movement resumed in 2022. The agreement will include trade in goods, energy, logistics, investment, and labour mobility. With almost 9 million Indians residing in the GCC and the region providing more than 60% of India's crude oil imports, the FTA would formalise a deep, interdependent economic relationship.

India's trade experience over the past 20 years illustrates how the nation has evolved from concentrating on regional partners to emerging as a key participant in international trade.

Between 2005 and 2015, India executed significant trade agreements with nations such as Singapore, Japan, and ASEAN to lower tariffs and foster investments.

From 2015 to 2025, it shifted towards deeper and newer pacts such as with the UAE, Australia, and EFTA for services, digital trade, movement of skilled workers, and clean energy.

In the direction of 2025–2035, India is negotiating huge deals with the US, EU, UK, and others to increase exports, enhance supply chains, and garner higher investment. These agreements not only facilitate India's economic development but also contribute to job creation, promote world partnerships, and render India competitive in the global market. This indicates how trade has emerged as a significant component of India's vision for long-term growth and world leadership.

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BY DEEPTI MAURYA

INDUSTRY AND INNOVATION CENTER

TEAM GEOSTRATA

info@thegeostrata.com