India has 18 FTAs but must now focus on boosting exports amid tough 2026 trade outlook: GTRI

India's journey in global trade has been dynamic, evolving significantly from a largely protectionist regime to an increasingly open economy. The recent recommendation by the Global Trade Research Initiative (GTRI) to shift focus from signing new Free Trade Agreements (FTAs) to maximizing the existing 18 agreements marks a crucial inflection point in India's trade policy. This strategic pivot is not merely about numbers but about depth of engagement and domestic preparedness, especially given the challenging global economic landscape.

Historically, post-independence, India largely pursued an import-substitution industrialization strategy, characterized by high tariffs and quantitative restrictions, aimed at fostering self-reliance. The seminal economic reforms of 1991 ushered in an era of liberalization, integrating India more closely with the global economy. This shift led to India's active participation in multilateral forums like the World Trade Organization (WTO) and a growing interest in bilateral and regional trade agreements. Over the past two decades, India has signed numerous FTAs with key partners, including ASEAN (2009), Japan (2011), South Korea (2010), UAE (2022), and Australia (2022), aiming to reduce trade barriers and boost exports. The rationale was often to gain preferential market access for Indian goods and services, attract foreign investment, and integrate into global supply chains.

The GTRI's analysis, however, highlights a critical gap: while India has accumulated a substantial number of FTAs, their full potential for export growth has not been realized. The current global environment is fraught with challenges, including rising protectionism, geopolitical tensions leading to supply chain disruptions, and new 'climate barriers' or environmental regulations that can impact trade. In this context, merely signing more FTAs without robust domestic execution risks diluting efforts. The GTRI advocates for a concentrated effort on specific sectors—electronics, engineering goods, and textiles—which hold immense potential for export expansion. Success by 2026, according to the report, will hinge less on external opportunities and more on internal reforms: enhancing product quality, reducing manufacturing costs, and improving logistical efficiencies.

Several key stakeholders are central to this policy shift. The **Government of India**, particularly the **Ministry of Commerce & Industry**, is the primary architect and executor of trade policy. Their strategic decisions on FTA negotiations, implementation, and export promotion schemes directly impact the nation's trade trajectory. **Indian exporters and industry associations** (such as the Federation of Indian Export Organisations - FIEO, and various Export Promotion Councils) are critical beneficiaries and drivers. Their ability to innovate, adapt to global standards, and leverage FTA benefits is paramount. **Importers** also play a role in facilitating trade flows. Think tanks like the **GTRI** serve as crucial advisors, providing data-driven insights and policy recommendations. Internationally, bodies like the **WTO** set the broader rules of global trade, influencing the context within which bilateral and regional FTAs operate.

This strategic redirection holds immense significance for India. Economically, a robust export sector is vital for sustaining high GDP growth, creating employment opportunities, and ensuring a healthy balance of payments. By maximizing existing FTAs, India aims to improve its global competitiveness and integrate more effectively into global value chains. This aligns perfectly with national initiatives like "Make in India" and "Atmanirbhar Bharat," which seek to boost domestic manufacturing capabilities and make Indian products globally competitive. Politically, successful trade engagement strengthens India's standing on the world stage, fostering deeper bilateral relations with trading partners. Socially, increased exports can lead to job creation, higher incomes, and improved living standards, especially in manufacturing and related service sectors.

From a constitutional and policy perspective, India's trade policy operates within a well-defined framework. **Article 246** of the Constitution places 'Trade and Commerce with foreign countries; imports and exports' under the Union List (Entry 41 of the Seventh Schedule), granting the central government exclusive power to legislate on these matters. The **Foreign Trade (Development and Regulation) Act, 1992**, serves as the primary legislative instrument governing foreign trade, empowering the government to formulate and implement policies. The **Foreign Trade Policy (FTP)**, periodically announced by the Ministry of Commerce & Industry (e.g., FTP 2023), outlines the government's strategy for promoting exports and regulating imports. Policies like the **Production Linked Incentive (PLI) Schemes** are designed to boost domestic manufacturing and make specific sectors globally competitive, directly supporting the goal of enhancing export capabilities.

Looking ahead, this renewed focus implies several future implications. It suggests a more pragmatic and results-oriented approach to trade policy. The emphasis on domestic execution will necessitate significant reforms in logistics, infrastructure, skill development, and ease of doing business. It could also lead to a more targeted approach in future FTA negotiations, focusing on agreements that offer genuinely deep and mutually beneficial market access. India's ability to navigate increasing global protectionism and climate-related trade barriers will depend heavily on its internal strengths and adaptability. This strategic shift is not just about trade numbers; it's about building a resilient, competitive, and sustainable Indian economy for the coming decades.