India's FTAs: A trick for foreign investment or a shield for local jobs?

As of 2026, WTO records 384 notified FTAs in force. They form the institutional blueprint for India to secure crucial market access while protecting its businesses from unpredictable winds of geopolitical storms.

FTAs open vital windows of opportunity not just for large businesses, but also for startups, MSMEs, farmers, fishing enterprises and talent looking to monetise their skills on the world stage. Binding commitments cover tariffs, services market access and transparent trade rules, delivering the certainty businesses require to invest for the long term.

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India's trade negotiation strategy focuses on complementary economies that serve as primary export markets for goods and services. A key objective of recent FTAs is securing a level playing field for exporters in vital markets like the EU, Britain and Australia. This parity is especially urgent for labour-intensive sectors like textiles, apparel and footwear, where Indian products have historically faced steep tariffs while competitors enjoyed duty-free access. GoI is also negotiating trade agreements with Canada, Israel, and blocs like the EU and Mercosur.

Services are central to India's export and FTA strategy. By locking in commitments on cross-border digital delivery, recent FTAs help drive investor confidence across the rapidly expanding GCC ecosystem, tech startups and digital innovators.

FTAs have allowed India to innovate at the negotiating table, securing binding commitments that enhance mobility for talent. Key achievements include mobility provisions and side letters for students and professionals, frameworks like India-Britain Double Contributions Convention (DCC) to prevent dual social security taxation on temporary assignments, and mobility rights in niche areas such as yoga.

A hallmark of India's next-gen FTAs is recognition of the intrinsic link between trade and investment. Recent agreements explicitly link market access to investment outcomes. A prime example is India-EFTA agreement, which conditions market access for EFTA nations on a $100 bn FDI commitment and 1 mn jobs in India. India-New Zealand FTA features comparable provisions.

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Modern trade is no longer confined to tariffs. It requires navigating 21st-c. dimensions with an equal focus on rules, including technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, and trade facilitation (TF). Product standards and other regulatory requirements frequently pose hurdles to market access than tariffs. Provisions for regulatory harmonisation and cooperation within India's FTAs offer structured, institutional mechanisms to mitigate these barriers for Indian exporters.

Not engaging with environmental and labour standards is no longer an option. New FTAs build cooperative arrangements to address these concerns, in a manner not inimical to Indian interests.

India's FTA policy is not piecemeal, but targets complementary economies that together represent two-thirds of global GDP and 75% of global import demand. Negotiation of these FTAs relies on continuous stakeholder engagement and whole-of-government approach. This ensures trade policy is aligned with India's broader imperatives related to industrial development, innovation and socioeconomic progress, with agreements structured so that vulnerable sectors and populations are protected.

FTAs include robust provisions to ensure that opening the market does not cause disruptive shocks to domestic stakeholders. Liberalisation in vulnerable and strategic sectors is phased over an extended period to allow local industries time to adjust. Several key sectors, like agriculture, are excluded, while safeguard measures stand ready against sudden import surges.

Strategic FTAs will liberate Indian businesses to focus on what truly matters: expanding, innovating and marketing, free from the friction of policy uncertainty and regulatory hurdles.

The writer is commerce secretary, GoI