The Commerce Department has started a dedicated FTA Utilisation Cell to help exporters make better use of trade agreements. With many past pacts failing to boost exports significantly, this initiative aims to fix the gap between policy and actual business growth by focusing on supply chains, investment, and better market access.
The Ministry of Commerce has launched a new FTA Utilisation Cell to ensure that Indian businesses can better take advantage of the country's growing list of free trade agreements. This move, announced by Commerce Secretary Rajesh Agrawal, marks a shift in how the government approaches trade deals. The goal is to move beyond simply signing treaties to ensuring that these agreements actually lead to higher exports and better market access for Indian firms.
Moving From Signing to Execution
For years, a common issue in India’s trade policy has been the low utilization of trade deals. While the government often signs pacts to reduce import taxes, many Indian exporters have struggled to actually use these benefits. This is often because they find it difficult to navigate the complex rules of origin or meet the specific quality and documentation requirements of partner countries. The new cell will act as a bridge between the government and businesses, helping companies understand these agreements and use them to lower their costs and increase their sales abroad.
Focus on Quality and Supply Chains
The initiative aims to change the mindset around trade deals, viewing them not just as a way to cut tariffs, but as a framework for long-term investment. A key focus is the India-EFTA Trade and Economic Partnership Agreement (TEPA), which includes a commitment of $100 billion in investments and the creation of one million direct jobs over the next 15 years. To succeed, the government is pushing export promotion councils to draft five-year action plans. These plans will focus on helping domestic firms improve their supply chains, ensuring they can compete on quality and price in developed markets.
Hurdles to Overcome
While the creation of this cell is a positive step, success is not guaranteed. A major challenge for Indian exporters remains the presence of non-tariff barriers. These are the rules and standards—such as specific packaging requirements, safety certifications, and quality checks—that can block goods from entering a market even when the import taxes are removed. If Indian companies cannot meet these quality and safety standards, they will struggle to compete, regardless of any government trade agreement. Furthermore, geopolitical tensions and supply chain disruptions continue to pose risks to global trade, meaning that export-oriented companies must remain agile to navigate these uncertainties.
Investors and businesses should monitor how effectively these new action plans are implemented. The success of this initiative will likely depend on whether industry associations can actually help firms overcome these technical hurdles and scale their production to meet international standards. If the cell succeeds in helping companies navigate these complex rules, it could lead to better margin profiles for export-heavy sectors that have previously struggled to fully benefit from trade pacts.