India has altered its approach to free trade agreements (FTAs), moving from a defensive stance to a more targeted, growth-oriented strategy. The focus is now on partners with strong trade synergies, efficient logistics, and aligned economic interests. This shift aims to enhance existing trade momentum rather than creating new relationships from scratch.
The total trade between India and countries covered by FTAs signed post-2021 surged by 92% between FY 2020–21 and FY 2024–25, surpassing the 41.5% growth in India’s global trade. These partner countries now constitute nearly 16.5% of India’s overall trade basket, up from around 11-12% in FY 2021. The strategy prioritizes engaging with high-intensity, trade-oriented economies that align with India’s strengths in various sectors.
Recent FTAs with Australia, New Zealand, the UK, and the EFTA countries exemplify India’s new trade approach. For instance, the FTA with Australia, signed in 2022, led to a 96% increase in bilateral trade between FY 2020–21 and FY 2024–25. Australia supplies essential resources to India’s industrial base, while India exports diverse products, fostering cooperation in services and clean energy. Similarly, the FTA with New Zealand, inked in 2025, boosted trade by 50%, emphasizing the mutual benefits and careful market access considerations.
The FTA with the UK, also signed in 2025, saw a 76% trade growth even before formal ratification. This agreement enhances market access, addresses service barriers, and strengthens investment ties, showcasing India’s confidence in engaging with developed markets. Additionally, the trade deal with the EFTA countries in 2024, though showing a 19% merchandise trade growth, focuses on investment commitments, technology collaboration, and job creation, marking a strategic shift in India’s FTA approach.
