India has secured landmark trade agreements with both the European Union and the United States, marking a historic shift in its trade policy. Officials describe the EU pact as the “mother of all trade deals” and the US agreement as the “father of all trade deals,” even as critics warn that the interim US deal heavily favors American interests.
The agreements are India’s 10th free trade pact since 2014, signaling a sharp departure from the country’s earlier protectionist approach, which stalled negotiations with several nations for decades. Following these breakthroughs, India has also agreed to launch discussions with the six-nation Gulf Cooperation Council (GCC), a bloc responsible for around 15 percent of its global trade.
Despite the high-profile deals, experts caution that signing agreements is only the first step. Historical data show India has struggled to fully leverage free trade agreements (FTAs). Between 2017 and 2022, exports to FTA partners rose by 31 percent, while imports from those countries increased by 82 percent, according to consultancy EY. Low utilization rates, often around 25 percent, contrast sharply with 70–80 percent in developed economies.
“The success of any FTA lies in how it is utilized,” said Sumedha Dasgupta of the Economist Intelligence Unit. Small and medium exporters often face high paperwork burdens, audit risks, and difficulty understanding the rules, limiting their ability to take advantage of tariff cuts.
Execution remains a major hurdle. Kiran Kotla, CEO of Dista, said exporters face challenges with Rules of Origin, costly documentation, non-tariff barriers such as testing and labeling, and inconsistent customs interpretation. “Many exporters technically qualify for lower tariffs but still pay full duties because proving eligibility is slow, risky, or expensive,” he explained. Under the new EU agreement, exporters must self-certify origin claims, assuming both legal and financial responsibility for accuracy, according to Ajay Srivastava of the Global Trade and Research Initiative.
Beyond procedural issues, India faces deeper competitiveness challenges. Experts note that countries like Vietnam have gained export advantage through faster logistics, reliable customs clearance, and integrated supply chains. Priyanka Kishore, founder of Asia Decoded, said India’s manufacturing push has been fragmented and cautious, limiting exposure to international competition. While India excels in hi-tech manufacturing, such as iPhones for Apple, it lags behind peers in textiles, footwear, furniture, and other labor-intensive sectors.
As a result, even with tariff access, India struggles to capture market share from competitors with streamlined export operations. Analysts argue that reforms in logistics, customs, and infrastructure are essential to translate FTAs into tangible growth. Success in this area will also be critical to attracting private investment, generating jobs, and achieving India’s $1 trillion annual exports target.
With trade agreements in place, Delhi’s next challenge will be turning paper commitments into practical advantages for Indian exporters, ensuring that FTAs become a foundation for broader industrial and export growth rather than symbolic milestones.
