Mumbai, Oct. 27 -- India's FTAs are diversifying exports, drawing manufacturing investment, and weaving supply chains into global value chains, writes Vikash Khatri.
Global trade is governed by a multi-layered system of international rules, national laws and commercial practices. International rules, mostly defined by the World Trade Organisation (WTO), provide only a baseline, covering discriminatory practices, subsidies, tariffs and dispute settlement. Actual implementation begins with national laws around customs, EXIM regulations, product-specific rules and safeguards. Commercial practices, from ancient barter to complex tech deals, form the third layer. In this ecosystem, national laws become the driver of trade direction through tariffs, customs and subsidies.A Free Trade Agreement (FTA) is a treaty between two or more countries that gives businesses preferential access compared with normal conditions of trade. As FTAs define frameworks for trade and its volume, they are critical for the logistics sector due to the physical flow of merchandise. Increasingly, FTAs are becoming supply-chain agreements, not just tariff arrangements. They aim to diversify exports, attract manufacturing investment, and integrate supply chains into global value chains. Beyond visible impacts on ocean and air cargo volumes, they touch warehousing, hinterland transport, logistics infrastructure and technology interfaces.
Broadening trade pactsIndia has significantly expanded its FTA network to strengthen global trade and supply chains. At present, there are about 15 FTAs in place, nine of which have been concluded in the last five years, with another six in the pipeline. Recent agreements include the India-UAE Comprehensive Economic Partnership Agreement (CEPA), the India-Australia Economic Cooperation and Trade Agreement (ECTA), and the India-EFTA Trade and Economic Partnership Agreement (TEPA) with Switzerland, Norway, Iceland and Liechtenstein. India has also concluded FTAs with New Zealand and the UK. These pacts improve market access, reduce tariffs and simplify trade procedures.India is also advancing FTAs with Oman, Peru and the Southern African Customs Union (SACU). With the India-EU FTA signed in January 2026, the current and pipeline agreements are expected to diversify export markets, increase cross-border trade and create new opportunities for logistics, manufacturing and multimodal supply chains.These FTAs will not only increase trade volumes, but cargo concentration will also be redistributed across trade lanes. As tariffs fall and sourcing shifts, some traditional routes will gain traffic while others may lose share, forcing logistics companies to redesign networks, capacity and gateway strategies. Key trade lanes likely to be reshaped include India-ASEAN and East Asia, the India-UAE corridor and IMEC, the India-Australia and Oceania corridor, the India-Europe, UK and EFTA corridor, and the Eurasian route via the International North-South Transport Corridor (INSTC).India-ASEAN is now a $123 billion trade lane. Since the ASEAN FTA became operational, bilateral merchandise trade has nearly doubled over the last decade, making it one of India's most important container, automotive, electronics and machinery corridors. East-coast ports and Bay of Bengal connectivity determine whether Indian manufacturers plug reliably into ASEAN supply chains.The FTA with the UAE and Oman has clearly impacted trade volumes on this corridor, which is expected to grow even faster. The UAE's dual role as destination and re-export hub multiplies container, project cargo and high-value airfreight demand. West Coast ports such as Jawaharlal Nehru Port Authority (JNPA), Mundra, Pipavav and Kandla sit on the natural arc to Jebel Ali. As India and the UAE move toward their $200 billion bilateral trade target by 2032, this corridor will become a long-term structural growth lane.The India-Australia and Oceania corridor has become one of India's fastest-growing long-haul trade lanes after the ECTA came into force in 2022. The agreement is driving higher volumes in textiles, engineering goods, chemicals, pharmaceuticals, agriculture, minerals and critical raw materials, while negotiations continue for a broader comprehensive economic cooperation agreement.With the India-UK trade agreement in force and the India-EU package concluded, trade is expected to grow steadily over the coming years. This will increase container movement, automotive cargo, machinery, chemicals, pharmaceuticals and apparel exports. Growth will depend on the reliability of the Red Sea-Suez route and the commercial viability of IMEC.Discussions between India and the Eurasian Economic Union (EAEU)-comprising Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan-have brought the International North-South Transport Corridor back into focus, highlighting potential cost savings of 30 per cent and transit-time reductions of 40 per cent on certain routes. It will not replace Suez overnight, but as a resilience option it becomes more valuable as FTA volumes and geopolitical risk rise.
Shifting trade lanesAn FTA also creates scenarios where some trade lanes are winners, and others lose share due to shifts in trading partners. In the case of India's current and prospective FTAs, pressure may build on specific lanes. In China-India trade, some imports may shift to FTA partners where tariff advantages create cost benefits. Similarly, CEPA strengthens the UAE as a preferred regional distribution and re-export hub, concentrating cargo flows through Jebel Ali at the expense of other Gulf ports.Beyond policies and tariffs, the success of FTAs depends on strong end-to-end supply-chain integration across ports, rail, road, warehousing, customs and compliance. From a logistics perspective, India must address several structural challenges to fully realise the benefits of these agreements. Over-reliance on relatively expensive transport modes, weak first- and last-mile connectivity, port inefficiencies and fragmented logistics processes can increase the effective cost of trade. These higher logistics costs reduce the competitiveness of Indian exports and limit the overall impact of FTAs.
About the author:Vikash Khatri, Founder, Aviral Consulting, has over two decades of experience in strategy, business transformation, and supply chain logistics, and is also known for authoring insightful industry reports.
Published by HT Digital Content Services with permission from Infrastructure Today.