India (Commonwealth Union)_ India is rapidly expanding its network of free trade agreements (FTAs), a move that could significantly change the country’s position in global trade and supply chains. Accordingly, Commerce and Industry Minister Piyush Goyal has said India’s growing trade partnerships could eventually give the country preferential access to economies representing nearly 75 to 80 percent of the world’s economic output. Speaking at an event organised by the US Indian Community Foundation in Chicago, Goyal said India had moved from having trade agreements covering about $10 trillion in global GDP before 2014 to pursuing agreements with 31 developed and developing countries representing nearly $60 trillion. Another six to eight negotiations are also underway, involving economies worth around $15 trillion.
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The scale of this expansion is important because FTAs can reduce tariffs and make Indian goods and services more competitive in overseas markets. They can also establish clearer rules for investment, services and other areas of business. For Indian manufacturers and exporters, this could mean easier access to major markets and stronger opportunities to become part of international production networks. India has already strengthened its trade links with several important partners. The India-Mauritius CECPA came into force in 2021, followed by the India-UAE CEPA and India-Australia ECTA in 2022. The agreement with the European Free Trade Association, covering Switzerland, Norway, Iceland and Liechtenstein, added another important European connection. India has also advanced trade agreements with the United Kingdom, Oman, New Zealand and the European Union, while continuing to develop its trade framework with the United States.
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The importance of these partnerships goes beyond increasing exports. Together, they can help India attract companies looking to diversify their manufacturing and sourcing operations. As businesses seek alternatives and additional production bases across Asia, India’s large domestic market, growing manufacturing capacity and expanding FTA network could make the country a more attractive location for global supply chains. India is also looking beyond its existing agreements. Accordingly, trade negotiations or discussions are expected to expand with countries and groups including Canada, Mexico, Israel, Chile and Mercosur. Talks with the Gulf Cooperation Council and the Southern African Customs Union could further widen India’s reach into the Middle East and Africa. At the same time, India is reviewing its existing trade arrangements with ASEAN, South Korea and Japan.
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If these negotiations progress, Indian businesses could gain access to a broad network of markets under more favourable conditions than some competing economies. This could strengthen India’s role as a bridge between major economic regions and encourage multinational companies to manufacture, source and distribute products from the country. The government sees this trade strategy as part of a much larger economic transformation. Goyal has urged Indian-American and US investors to participate in India’s expansion as the country seeks to grow from a roughly $4 trillion economy towards a $30 trillion economy by 2047. The push for deeper trade ties is being supported by improvements in infrastructure, digital connectivity, manufacturing and technology. The growth of airports, 5G networks, defence production and the startup ecosystem is creating a broader base for investment and international business.
During his Chicago visit, Goyal met US companies, investors, startups and business organisations to discuss investment and stronger India-US economic cooperation. At a US-India Business Council roundtable, discussions focused on startups, innovation, venture investment and partnerships that could help businesses expand across borders. India’s expanding FTA network could therefore become one of the key foundations of its ambition to emerge as a global trade and supply chain hub. If the agreements are implemented effectively and supported by competitive infrastructure and manufacturing, India could move beyond being simply a large consumer market and become a major production, sourcing and distribution centre connecting Asia with Europe, North America, the Middle East, Africa and other parts of the world.
