Prepare for FTA implementation

India’s trade negotiations must be accompanied by sector-specific strategies to upgrade and align industries with global standards

- AMITA BATRA

The India-United States negotiations are reported to be “very close” to a trade deal (Business Standard, October 25, 2025).

However, given that a trade deal with the US, when accomplished, will not be a World ‘Trade Organization-compliant, legally-binding free trade agreement (FTA), the bilateral trade environment will continue to be ridden with uncertainty. The objective of export market diversification, therefore, remains paramount for India and FTAs can help achieve this objective.

So, it is encouraging to note that after having signed a comprehensive FTA with the United Kingdom (UK) earlier this year, India’s FTA negotiations with the European Union (EU) are moving towards finalisation by the end of the year. However, it may be noted that benefits of an FTA can be realised only after they are ratified by respective partner countries and preferential market access provisions are fully implemented. It is, therefore, important that the interim period between the signing and implementation of an FTA be used to prepare well to maximise potential trade creation possibilities. This is particularly relevant in the textiles and clothing (T&C) sector, which, after agriculture, is the second-largest source of employment in India, and has been among the hardest hit by the imposition of “reciprocal tariffs” by the US. Furthermore, it is the sector where India’s export performance has been disappointing in the recent past, both globally and in the target FTA markets of the EU and UK.