Signing FTAs is the easy part for India's exporters (opens the source in a new tab)
- With pacts with the UK and New Zealand in force and the EU deal awaiting implementation, exporters from Surat textiles to auto parts are chasing certificates and learning rules of origin to qualify for lower tariffs, Mint reports.
- The record is weak: Bank of America estimates only 20-30% of eligible exports use FTA preferences. Small firms face certification costs, carbon audits, suppliers who won't open their books and imported Chinese parts that muddy proof of origin.
- Exporters also blame customs disputes and costly inputs; one think tank head suggests cutting India's many import duty rates to a handful.
- 20-30%
- Eligible exports using FTA benefits (BofA est.)
- 1,400+
- Yearly compliance obligations per manufacturer (BofA est.)
Why it matters Tariff cuts only pay off if small firms can prove origin and pass audits. If they can't, the gains go to the few big exporters already equipped, and the old story of FTAs widening the deficit repeats.
Other side Low use may say more about price than paperwork. If Indian goods still cost more than Vietnamese or Chinese ones, easier forms won't win orders, and skipping the perk can be a rational choice.