India Moves To Improve FTA Utilisation Rate In Bid To Soften US Tariff Hit

India is ramping up efforts to maximise the benefits of its free trade agreements as it braces for potential headwinds from higher US tariffs.

The government is fast-tracking measures to improve FTA utilisation, aiming to ensure exporters and importers take full advantage of preferential market access. For instance, under the India-Australia Economic Cooperation and Trade Agreement, utilisation currently stands at 84% for exports and 86% for imports. These are levels that officials are keen to push to 100%, according to sources.

Commerce ministry officials said exercises are underway to help existing FTAs reach their “saturation point” through targeted facilitation and greater awareness among businesses. The approach includes identifying bottlenecks, simplifying processes, and promoting untapped opportunities in partner markets.

At the same time, India is looking beyond existing agreements to expand its trade footprint. The Agricultural and Processed Food Products Export Development Authority (APEDA) has already introduced 15 new products into 28 new markets between April and July, underscoring the push to diversify both product range and destinations.

Officials emphasise that increasing FTA utilisation is a gradual but critical process, one that could help cushion the impact of any trade disruptions with key partners such as the US.

According to an analysis by the Commerce Ministry of 40 countries of focus, India's merchandise exports are seeing positive growth in 26 in April-July, while 14 are seeing a downtrend. "We'll work on all 40 countries for exports, with additional 10 countries being added to the exercise," an official said.