During a Jaipur workshop for exporters, the Ministry of Commerce announced that India’s exports rose from $466 billion to $866 billion over 12 years (CAGR 5.7%). The outreach aims to equip regional trade bodies, MSMEs and FPOs to use new Free Trade Agreements to expand into high‑income markets.
What is the current issue
India’s external sector shows sustained expansion driven by services and value‑added manufacturing. Recent FTAs and targeted incentives have opened preferential access to key markets. The immediate policy task is converting market access into higher volumes, deeper GVC participation and compliance with international standards.
Why it matters
- Economic impact: Export growth supports manufacturing employment, foreign exchange and industrial upgrading.
- Trade policy: Deep FTAs change tariff and regulatory settings and require domestic compliance capacity.
- MSMEs and agriculture: Access to high‑income markets offers premium realisation, subject to SPS and RoO compliance.
- Strategic ties: FTAs shape geopolitical and investment linkages with regions such as the Gulf, Europe and EFTA states.
Export growth trajectory and drivers
Macro trajectory
Total exports rose to $866 billion from $466 billion over 12 years, a CAGR of 5.7%. The government’s long outreach programme targets capacity building for districts, MSMEs and FPOs to exploit FTA provisions.
Services sector
Services registered growth above 9% over the period. Drivers include information technology consulting, engineering solutions, specialised financial services and expansion of Global Capability Centres in domestic tech hubs. Services account for a rising share of export receipts and foreign exchange earnings.
Merchandise and manufacturing
Non‑petroleum merchandise exports hit record levels. Engineering goods and electronic products led diversification. Production‑Linked Incentive (PLI) schemes for electronics accelerated local smartphone and hardware assembly, shifting the export basket toward higher value‑added manufactured products.
Strategic Free Trade Agreements and market access
Trade diplomacy approach
India has pursued deep, comprehensive economic partnerships with substantial tariff concessions, measures to reduce non‑tariff barriers, and explicit rules of origin. The aim is to integrate domestic manufacturers into global value chains and attract investment.
| Agreement | Partner | Key provisions |
| India‑UAE CEPA | United Arab Emirates | Zero‑duty access on 99% of Indian exports by value; bilateral trade has crossed $100 billion. |
| India‑EFTA TEPA | Switzerland, Iceland, Norway, Liechtenstein | Entered into force 1 Oct 2025; duty‑free access for 98% of goods; binding $100 billion FDI commitment. |
| India‑EU FTA framework | European Union (27 states) | Negotiations concluded; covers tariff concessions on 99% of bilateral lines; expected ratification in 2027 to protect trade worth >₹3.2 lakh crore. |
| India‑Mauritius CECPA | Mauritius | In force since 2021; preferential access for textiles, agriculture and pharmaceuticals; first CEPA with an African nation. |
Institutional support and regional export diversification
State and district mapping
- Rajasthan & Punjab: Technical textiles, readymade garments, structural engineering components, handicrafts.
- Haryana: Basmati rice, premium dairy and processed foods; emerging clusters in pharmaceuticals and organic chemicals.
- District as Export Hubs (DEH): District Export Promotion Committees identify district‑level export potential and link producers to markets.
Export promotion infrastructure
- APEDA: Expanded regional offices offer testing, certification and compliance assistance for SPS requirements of EU and Western markets.
- DGCI&S: Official statistical agency for trade data compilation and publication.
- Department of Commerce: Nodal authority for trade policy, SEZs and multilateral negotiations.
Policy mechanisms for fair trade and compliance
- RoDTEP: Remission of embedded central, state and local duties to exporters, aligning refunds with WTO norms.
- CAROTAR Rules (2020): Customs rules for administration and verification of Rules of Origin to prevent circumvention of FTA benefits.
- Testing and SPS compliance: APEDA and regional labs assist exporters to meet sanitary and phytosanitary standards required by high‑income markets.
- Customs verification: Strengthened origin verification and post‑export audits are used to enforce RoO.
Challenges to sustaining export momentum
- SPS and quality standards: Meeting evolving EU and other high‑income market standards imposes testing and certification costs for producers and MSMEs.
- Rules of Origin circumvention: Complex GVCs and third‑country routing require rigorous origin verification and inter‑agency coordination.
- Infrastructure and logistics: Ports, cold chain and testing infrastructure need scaling to support higher volumes and perishable goods.
- MSME capacity: Many exporters lack compliance, finance and scale required to exploit preferential access fully.
- Policy and ratification timelines: FTA benefits crystallise only after legal ratification and domestic rule alignment; delayed ratification constrains short‑term gains.
- External risks: Currency volatility, protectionist measures abroad and global demand shocks can affect export trajectories.
Model Questions
- Discuss the key drivers of India’s export growth over the last decade, with reference to structural changes in the export basket and the role of Production‑Linked Incentive (PLI) schemes. [GS‑III: Economic Development]
- Examine how recent Free Trade Agreements have altered market access and integration of Indian firms into global value chains. Illustrate with examples. [GS‑II: International Relations]
- Analyse the institutional mechanisms and policy measures used by the Union Government to promote exports, including state‑level diversification and exporter support. [GS‑II: Governance]
- Despite export growth, what challenges threaten sustainability and fair trade? Suggest policy priorities to address them. [GS‑III: Economic Development]
Answer should state overall growth (from $466bn to $866bn; CAGR 5.7%), emphasise services growth >9% (IT, engineering solutions, GCCs), note non‑petroleum merchandise highs led by engineering goods and electronics, and explain how PLI schemes accelerated smartphone and hardware assembly, raising value‑added manufacturing and shifting exports from raw materials to high‑tech products.
Answer should describe the shift to deep CEPA/TEPA models with tariff concessions, NTB reductions and clear RoO; cite India‑UAE CEPA (99% zero‑duty, trade >$100bn), India‑EFTA TEPA (98% duty‑free, FDI commitment) and India‑EU framework (tariff coverage on 99% lines, pending ratification). Explain how these provisions enable GVC integration and attract investment.
Answer should list DEH and District Export Promotion Committees for grassroots mapping, APEDA regional expansion for SPS testing and certification, DGCI&S for trade data, RoDTEP for duty remission, CAROTAR for RoO enforcement, and Department of Commerce as nodal ministry; explain how these measures improve market readiness of MSMEs and FPOs.
Answer should identify SPS compliance costs, RoO circumvention risk, infrastructure/logistics gaps, limited MSME compliance capacity, and external demand/currency risks. Policy priorities: scale testing labs, strengthen origin verification and post‑export audits, finance and capacity building for MSMEs, expedite FTA ratification and align domestic rules, and invest in port and cold‑chain infrastructure.