Free Trade Agreements crucial for Indian manufacturing: Darpan Jain

FTAs are essential for India's manufacturing growth, says Chief FTA negotiator Darpan Jain. He highlighted gains in market access, investment flows, and how the expanding FTA network addresses steep duties in developed nations on key sectors.

Free trade agreements are no longer optional for India's manufacturing sector but essential to its growth strategy, according to India's Chief FTA negotiator Darpan Jain who cited sharp gains in market access, investment flows, and regulatory cooperation with partner nations.

Addressing the 3rd CII Manufacturing Conclave here on Thursday, Jain who is an Additional Secretary in the Department of Commerce told industry leaders that despite falling global tariffs, several developed economies continue to impose steep duties ranging from 10 to 26 per cent on labour-intensive sectors such as apparel, textiles, leather, marine products and agriculture. India's expanding FTA network, he said, directly addresses this disadvantage while offering exporters predictability, investment linkages and smoother regulatory alignment with partner countries.

A Shift Towards Comprehensive Agreements

Tracing India's trade agreement journey, Jain noted that pre-2010 pacts were largely "shallow," limited in scope and confined mostly to neighbouring and developing economies. Since 2018, however, India has shifted decisively toward comprehensive, deep FTAs spanning goods, services, digital trade, sustainability, labour, environment and investment, with agreements such as those with the UK and EU running into hundreds of pages of text and thousands of pages of schedules.

The scale of transformation, he said, is stark. Prior to 2021, India's FTA partners represented a combined GDP of roughly USD 10 trillion and an import market of USD 5 trillion, mostly smaller, competing economies. With eight FTAs concluded in the last five years and more under negotiation, India's partner economies now represent over USD 56 trillion in GDP and a USD 12 trillion import market, covering more than two-thirds of global trade.

Sector-Specific Gains and New Opportunities

Highlighting sector-specific gains, Jain pointed to major duty eliminations up to 14 per cent in textiles, 32 per cent in marine products, 9 per cent in engineering goods, and 12 per cent in electronics, with near-total tariff elimination secured with Australia, New Zealand and the EU.

He noted India's current overall exports stand at roughly USD 470 billion, while labour-intensive sectors alone offer an addressable opportunity worth USD 1.58 trillion under new FTAs, more than four times current exports.

Unprecedented Commitments and Industry Support

Jain also cited unprecedented commitments embedded in recent agreements including a USD 100 billion investment pledge under the India-EFTA TEPA, student-mobility commitments with New Zealand, and taxation-related provisions for IT companies under the Australia FTA, describing them as unique, context-specific gains not seen in any other country's trade agreements.

To help industry capture these opportunities, Jain said the government has launched a five-year, Rs 20,000 crore Export Promotion Mission covering the full export lifecycle from market intelligence and regulatory compliance to pre- and post-shipment credit and e-commerce support. He added that the Commerce Department, in partnership with CII, plans to take FTA awareness down to the district and cluster level to close the information gap facing exporters, particularly MSMEs.

Future Priorities and Customised Negotiations

"We are not just doing FTAs with a template; we are looking at the specific challenges facing industry in each geography," Jain said, adding that continuous engagement on emerging regulations such as the EU's CBAM and deforestation rules remains a priority alongside tariff negotiations. (ANI)

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