India has historically remained central to global trade, with ancient trade routes connecting the subcontinent to markets across Asia, Africa, and Europe. Today, India is once again emerging as one of the world’s largest and fastest-growing markets. A pivotal moment in India’s modern trade journey was the economic liberalization reforms of the 1990s, which opened the Indian market to international investors and goods. Another pivotal phase is unfolding now; as global supply chains undergo transformation and geopolitical alignments shift, India is leveraging its diplomatic approach of multi-alignment while diversifying its trade partnerships at an unprecedented pace. At present, nearly 70 percent of global GDP and two-thirds of global trade are open to India through existing or negotiated trade arrangements, reflecting the country’s expanding footprint in international commerce.
India’s trade agreements are not uniform in structure or ambition. They include Free Trade Agreements (FTA), Trade and Economic Partnership Agreements (TEPA), Comprehensive Economic Partnership Agreements (CEPA), Comprehensive Economic and Trade Agreements (CETA), and Comprehensive Economic Cooperation Agreements (CECA). Each framework involves varying levels of commitments in trade, services, investment, and regulatory cooperation. These distinctions help India balance its domestic economic priorities while deepening global integration.
Types of India Trade Agreements: FTA vs CEPA vs TEPA Explained
India’s trade agreements have gradually evolved in scope and depth, moving from tariff-focused arrangements to comprehensive economic partnerships.
A standard Free Trade Agreement (FTA) primarily focuses on reducing or eliminating tariffs on goods traded between partner countries. Expanding on this structure, a Comprehensive Economic Cooperation Agreement (CECA) includes additional elements such as liberalization of selected services, investment provisions, and broader economic cooperation.
A Comprehensive Economic Partnership Agreement (CEPA) represents a deeper framework of economic engagement. It typically covers trade in goods and services, investment flows, intellectual property rights (IPR), government procurement, competition policies, and institutional cooperation. Such agreements are often used for strategic bilateral partnerships with major economies.
More recently, India has also adopted the Trade and Economic Partnership Agreement (TEPA) model. This framework emphasizes modern trade priorities, including trade facilitation, supply-chain integration, technology cooperation, and mobility of professionals. India’s agreement with the European Free Trade Association (EFTA) is an example of this evolving structure.
At the most comprehensive level, Comprehensive Economic and Trade Agreements (CETA) incorporate deeper regulatory cooperation, sustainability provisions, government procurement commitments, and broader economic harmonization. These agreements represent the most advanced level of trade integration.
Game-Changing Deals and Tangible Outcomes
India’s free trade agreements reflect a deliberate strategy to expand market access across key economic regions while strengthening supply chains and investment flows.
Middle East Partnerships: The Middle East has emerged as one of India’s most dynamic trade corridors. In 2022, India signed a Comprehensive Economic Partnership Agreement with the UAE, granting preferential market access to 99 percent of Indian exports to the country and expanding opportunities across 111 service subsectors. The agreement has already delivered substantial results. India-UAE merchandise trade more than doubled from $43.3 billion in FY 2020–21 to over $100 billion in FY 2024–25. Key sectors such as gems and jewellery, which form a significant component of India’s exports to the UAE, have benefited considerably from the agreement. Similarly, the India-Oman Comprehensive Economic Partnership Agreement, signed in 2025, focuses on strengthening cooperation in strategically important sectors such as minerals, chemicals, base metals, and machinery, reinforcing India’s economic engagement with the Gulf region.
Indo-Pacific Trade Expansion: India has also expanded its trade engagement in the Indo-Pacific, a region central to global supply chains and economic growth. India’s Economic Cooperation and Trade Agreement with Australia, signed in 2022, has produced notable gains. Bilateral trade increased from $12.2 billion in 2020–21 to more than $24 billion in 2024–25, effectively doubling within a short period. India’s Free Trade Agreement with New Zealand further strengthens its economic presence in the Pacific region. The agreement includes a first-of-its-kind component on Health and Traditional Medicine, reflecting recognition of India’s traditional knowledge systems. New Zealand’s geopolitical position enhances the significance of the agreement, as it serves as a gateway to Oceania and the wider Pacific region. The agreement includes commitments across service sectors and extends most-favoured-nation treatment across 139 sectors for India, deepening the scope of bilateral economic cooperation.
Europe Engagement: Europe represents another critical pillar of India’s trade strategy. In 2024, India signed the Trade and Economic Partnership Agreement with the European Free Trade Association (EFTA), which comprises Switzerland, Norway, Iceland, and Liechtenstein. This agreement covers goods, services, investment, and phytosanitary measures, making it one of the most comprehensive trade arrangements India has concluded. A key feature of the agreement is the commitment by the EFTA bloc to invest $100 billion in India over a 15-year period and generate one million direct jobs, highlighting the agreement’s long-term developmental significance. India has also advanced a trade deal with the United Kingdom, resulting in a Comprehensive Economic and Trade Agreement framework that eliminates 99 percent of tariffs covering 100 percent of trade value. The agreement also includes provisions beneficial to Indian professionals, particularly the removal of dual social security payments for three years, and aims to double bilateral trade to more than $100 billion by 2030. Among India’s most significant deals is the India-European Union Free Trade Agreement. The European Union remains one of India’s largest trading partners, with merchandise trade reaching nearly $137 billion in 2024–25. The agreement aims to provide market access covering around 90 percent of India’s export value, increasing to 97 percent over time, along with access across 144 service subsectors.
Global South Cooperation: India’s trade diplomacy also prioritizes engagement with the Global South. In 2021, India signed a Comprehensive Economic Cooperation and Partnership Agreement with Mauritius, marking India’s first-ever trade agreement with an African country. The agreement included 315 export items and expanded access for Indian professionals to more than 100 service subsectors. The agreement has already shown measurable results. India’s trade with Mauritius increased from $690 million in 2019–20 to $887 million in 2024–25, reflecting growing economic cooperation between the two countries.
Ongoing Negotiations and a Pragmatic Trade Strategy
In recent years, India has concluded eight trade agreements with 37 developed countries, while negotiations continue with several key partners. These include the Gulf Cooperation Council (GCC), the Mercosur Group, and Latin American economies such as Mexico, Chile, and Peru, as well as Israel and Canada. Alongside expanding trade partnerships, India has adopted a cautious and pragmatic approach to liberalization. Many agreements incorporate phased tariff reductions and safeguards for sensitive sectors, ensuring that domestic industries and small businesses are protected during the transition. Taken together, these agreements illustrate a broader transformation in India’s economic diplomacy. India’s approach, unlike China’s volume-driven model or EU’s rules-heavy blocs, bets on selective integration exemplifying India’s carefully calibrated strategy.
