Parliament Question: FTA and MSME

GOVERNMENT OF INDIA MINISTRY OF COMMERCE AND INDUSTRY DEPARTMENT OF COMMERCE LOK SABHA UNSTARRED QUESTION NO. 2688 ANSWERED ON 04/08/2026 FTA AND MSME 2688. MR PATHAN YUSUF: Will the Minister of COMMERCE AND INDUSTRY (वाणिज्य एवं उद्योग मंत्री) be pleased to state: (a) the status of implementation of recently concluded Free Trade Agreements and ongoing trade negotiations; (b) the expected impact of these agreements on India's exports, manufacturing sector and employment; (c) the steps taken by the Government to enhance the competitiveness of Indian exporters, particularly for Ministry of Micro, Small and Medium Enterprises (MSMEs); and (d) the projections of export growth arising from these agreements, sector-wise? ANSWER वाणिज्य और उद्योग मंत्रालय में राज्यमंत्री (श्री णिणिन प्रसाद) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (SHRI JITIN PRASADA) (a) The status of implementation of recently concluded Free Trade Agreements (FTAs) and ongoing trade negotiations is at Annexure. (b) FTAs are economic instruments aimed at expanding trade, enhancing competitiveness and deepening economic integration. FTAs provide calibrated market access through tariff elimination at Entry into Force (EIF), phased tariff reductions/elimination, and sensitive/exclusion lists across sectors. The details of sectors covered, tariffs structure and salient features of the implemented FTAs may be sourced at https://www.commerce.gov.in/#/international-trade/trade-agreements Assessment of the impact of Free Trade Agreements (FTAs) is an ongoing exercise. India's recently concluded Free Trade Agreements (FTAs) with Australia, the UAE, EFTA, Oman, the UK and New Zealand are expected to provide opportunities for enhanced trade and growth of domestic industries. These agreements include provisions relating to investment and market access, which is expected to support domestic production, facilitate investment flows, and create opportunities for employment across labour intensive sectors including manufacturing, agriculture, MSMEs and allied sectors 1Further, before entering into new FTA negotiations, Government ensures that sector- specific stakeholder consultations are held at all stages of the negotiations. FTAs are negotiated with the endeavour to deliver comprehensive, balanced, fair and mutually beneficial outcomes. It also enables a preferential, stable and predictable trade ecosystem for Indian exporters in the trading partner countries. In addition to this structured approach, post-implementation, the Government is continuously engaged with all stakeholders to ensure effective FTA utilization through trade promotion, trade facilitation and addressing challenges if any. Strategic safeguards for sensitive sectors ensure export growth while protecting domestic priorities. (c) Government has taken several initiatives and measures, from time to time, towards enhancing domestic capacities and boosting exports from the country including for MSMEs, small exporters and regional industries as under: (i) The Foreign Trade Policy, effective from 1st April, 2023, designed to integrate India more effectively into the global market, improve trade competitiveness, and establish the country as a reliable and trusted trade partner; (ii) Export Promotion Mission: The Government has approved the Scheme for Export Promotion Mission (EPM) for the period FY 2025–26 to FY 2030–31, aimed at strengthening India’s export competitiveness - particularly for MSMEs. The EPM shall operate through two integrated sub-schemes: o Niryat Prothsahan, focused on improving access to trade finance through instruments such as interest subvention, export factoring, collateral guarantees for export credit, credit guarantee for e-commerce exporters, and credit enhancement support; and o Niryat Disha, focused on other trade enablers such as export quality and compliance support, international branding and packaging, market access initiatives, export logistics & warehousing, and trade intelligence. (iii) Bharat Trade Net (BTN): Bharat Trade Net (BTN), announced in the Union Budget 2025 is a flagship digital public infrastructure initiative to enhances MSME competitiveness by enabling simpler, paperless documentation, reducing compliance burdens, and facilitating faster, secure trade transactions recognized globally. (iv) The introduction of grassroots programs such as Districts as Export Hubs (DEHs) and E-Commerce Export Hubs enables MSMEs, start-ups, and artisans to access international markets at lower costs and with simplified export processes. (v) Strengthening infrastructure through the National Logistics Policy and PM Gati Shakti enhances multimodal connectivity and reduces logistics costs, directly benefiting MSME exporters by easing supply chain bottlenecks. 2(vi) Launch of a Common Digital Platform for Certificate of Origin, to facilitate trade and increase FTA utilisation by exporters. (vii) Government is continuously engaged with industry associations and concerned stakeholders, including Indian Missions abroad, Export Promotion Councils, trade associations and concerned Ministries/Departments, to advance trade through trade promotion, trade facilitation and remedial measures related to import and export. (viii) The Ministry of Micro, Small and Medium Enterprises has established 65 Export Facilitation Centers (EFCs) in its field offices across the country to provide requisite mentoring and hand holding support to MSMEs in exporting their products and services. Further, International Cooperation (IC) Scheme of Ministry of MSME facilitates participation of MSMEs in international exhibitions/fairs/conferences/seminar/buyer- seller meets abroad. (d) The operationalization of Free Trade Agreements (FTAs) has strengthened India's trade engagement with key partner countries by providing unprecedented market access, reducing trade barriers, enhancing supply chain linkages and creating new opportunities for Indian exporters across sectors. Despite persistent global challenges, including geopolitical tensions and supply chain disruptions, India's exports increased from US$ 776.4 billion in FY 2022-23 to US$ 863.1 billion in FY 2025-26. Merchandise exports to major FTA partner countries and trade blocs have been substantial at US$ 179.1 billion in FY 2025-26, accounting for 40.5% of India's total merchandise exports. Merchandise export to recent FTA partners also indicated significant export growth. For example, exports to the UAE increased from US$ 16.7 billion in FY 2021-22 (prior to CEPA implementation) to US$ 37.4 billion in FY 2025-26, while exports to Australia rose from US$ 4.0 billion in FY 2021-22 to US$ 7.3 billion in FY 2025-26 following the implementation of ECTA. Similarly, exports to EFTA countries increased from US$ 1.64 billion in FY 2019-20 to US$ 1.76 billion in FY 2025-26. Further, trade trends, including for exports and imports, continue to be shaped by a multitude of global and domestic factors, including economic growth, geopolitical developments, industry demand, domestic needs, commodity price movements and evolving supply chains. ***** 3Annexure referred to in reply to Part (a) of Lok Sabha Unstarred Question No. 2688 for answer on 04.08.2026 Recent Free Trade Agreements Date of Date of Sl. Name of the Agreement Signing of the Implementation of No. Agreement the Agreement India - Mauritius Comprehensive 22nd February, 1 Economic Cooperation and Partnership 1st April, 2021 2021 Agreement (CECPA) 18th February, 2 India-UAE CEPA 1st May 2022 2022 India-Australia Economic Cooperation and 3 2nd April, 2022 29th December 2022 Trade Agreement (Ind-Aus ECTA) India-European Free Trade Association (EFTA) Trade and Economic Partnership 10th March 4 01st October 2025 Agreement (TEPA) (Iceland, 2024 Liechtenstein, Norway, and Switzerland) India - UK Comprehensive Economic and 5 24th July 2025 15th July 2026 Trade Agreement (CETA) 18th December 6 India – Oman CEPA 01st June 2026 2025 Under ratification 7 India-New Zealand FTA 27th April 2026 process Note: India-European Union FTA negotiations concluded on January 27th, 2026. Also, India and the United States of America have announced on 7th February 2026 that the USA and India have reached a framework for an Interim Agreement regarding reciprocal and mutually beneficial trade. Negotiations are ongoing. Ongoing FTA Negotiations Ongoing FTA negotiations 1. India – Chile Comprehensive Economic Partnership Agreement (CEPA) 2. India – Canada Comprehensive Economic Partnership Agreement (CEPA) 3. India-Eurasian Economic Union (India-EAEU) FTA 4. India – Israel FTA 5. India – Peru FTA 6. India – USA Bilateral Trade Agreement (BTA) 7. India – Maldives FTA FTAs under review/ upgradation negotiations 1. India – Korea Comprehensive Economic Partnership Agreement (CEPA) Review 2. ASEAN - India Trade in Goods Agreement (AITIGA) Review 3. India – Australia Comprehensive Economic Cooperation Agreement (CECA) 4. India – Sri Lanka Economic and Technology Co-operation Agreement (ETCA) ***** 4