How India's FTAs can help you lower your export costs

Indian exporters can achieve significant cost savings by strategically using Free Trade Agreements. However, international trade complexities mean businesses might overpay without leveraging preferential tariffs. With monthly exports reaching figures like $36.4 billion, understanding FTAs helps maintain competitive pricing.

This article explains Free Trade Agreements and provides guidance on determining whether your products qualify for FTA benefits when exporting from India. We'll cover key concepts and practical steps.

What are Free Trade Agreements (FTAs) and their benefits

Free Trade Agreements (FTAs) are pacts between two or more countries designed to reduce or eliminate barriers to trade, primarily tariffs, fostering easier commerce between them.

FTAs create preferential trade channels, reducing costs for Indian businesses exporting to partner nations. The India-UAE agreement, for instance, streamlines access to a market receiving $3.07B monthly2. Significant trade also flows to partners like the U.S. ($8.44B)², and the UK ($1.17B)², highlighting the value of preferential terms.

Businesses must prove their goods qualify to access the lower tariffs offered under these agreements. This typically requires specific documentation, such as a Certificate of Origin, to demonstrate that goods meet the specified criteria and are eligible for Free Trade Agreement (FTA) preferences.

Which countries does India have a Free Trade Agreement with?

India actively participates in several Free Trade Agreements boosting exports across various sectors. These agreements typically reduce or eliminate tariffs on specific goods traded between member countries, benefiting industries ranging from textiles and agriculture to engineering goods and pharmaceuticals.

As of 2025, India has 13 active Free Trade Agreements (FTAs)³, with several others under negotiation or discussion. Here is a list of current agreements relevant to Indian exporters:

1. South Asian Free Trade Area (SAFTA): Implemented in 2006 among SAARC nations (e.g., Bangladesh, Nepal), it aims to create a free trade zone via gradual tariff reduction, though progress faces regional complexities regarding sensitive lists and non-tariff barriers.
2. India-Sri Lanka Free Trade Agreement (ISFTA): Effective in 2000, this pioneering bilateral agreement significantly boosted trade by offering preferential access, primarily benefiting Indian exports of automobiles, machinery, and textiles to Sri Lanka.
3. India-Nepal Treaty of Trade: Reflecting a special historical and economic relationship, this treaty allows duty-free entry into India primarily for Nepalese primary products, aimed at supporting Nepal's industrial and economic growth.
4. India-Bhutan Agreement on Trade, Commerce, and Transit: Characterized by complete free trade principles, this periodically renewed agreement facilitates seamless, duty-free bilateral trade across almost all goods, strengthening unique neighborly economic ties.
5. India-Thailand Free Trade Agreement: This agreement was initiated in 2004 via an Early Harvest Scheme (EHS), reducing tariffs on 82 specific items like electronics components and auto parts. It acts as a precursor to a more comprehensive, broader FTA.
6. India-Singapore Comprehensive Economic Cooperation Agreement (CECA): Operational since 2005, this broad pact enhanced goods trade, notably facilitated access to the services sector (like banking and telecom), and significantly encouraged bilateral investment flows.
7. India-Malaysia Comprehensive Economic Cooperation Agreement (CECA): Effective 2011, covers goods, services, and investments, aiming to boost trade beyond existing levels in areas like palm oil products, machinery, chemicals, and electronics components.
8. India-Japan Comprehensive Economic Partnership Agreement (CEPA): Since 2011, this agreement has progressively eliminated Japanese tariffs on over 90% of Indian exports (like textiles, gems, and marine products), while India reduces tariffs on Japanese goods like machinery and electronics.
9. India-South Korea Comprehensive Economic Partnership Agreement (CEPA): Effective 2010, designed to increase bilateral trade (currently strong in automobiles, electronics, machinery) by phasing out or reducing tariffs and addressing non-tariff trade barriers.
10. India-ASEAN Free Trade Agreement (FTA): This agreement links India with 10 Southeast Asian nations (Goods Agreement 2010, services/investment 2014), creating a vast integrated market by reducing tariffs on thousands of product lines, though utilization varies across sectors.
11. India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA): Signed in 2021, this agreement, India’s first with an African nation, grants preferential access to the Mauritian market for hundreds of Indian goods, including textiles, pharmaceuticals, and agricultural products.
12. India-UAE Comprehensive Economic Partnership Agreement (CEPA): Implemented May 2022, aims to eliminate duties on 90% of Indian exports (benefiting gems, jewelry, agriculture, textiles, and engineering goods) to the UAE within 5 years, showing rapid enhancement of trade.
13. India-Australia Economic Cooperation and Trade Agreement (ECTA): Effective December 2022, the ECTA offers immediate zero-duty access for over 96% of Indian exports (boosting textiles, leather, gems, jewelry, and engineering goods) to Australia, significantly enhancing key sector trade potential.

How to check if your export is eligible under FTAs

Determining if your exports from India qualify for FTA benefits involves verifying both your product and the specific trade agreement's requirements. This check ensures you can claim preferential tariffs.

Here’s a step-by-step guide to help determine FTA eligibility for your export:

• Identify the destination and FTA: Using official government resources, confirm the destination country for your export and verify whether India has an active Free Trade Agreement with it.
• Classify your product: Determine your product's accurate commodity trade classification using the correct understanding your product's Harmonized System (HS) Codes. This code is needed for tariff checks and RoO evaluation.
• Check the FTA tariff schedule: Locate your product's HS Code within the specific FTA's tariff schedule document to find the preferential duty rate offered compared to the standard rate.
• Understand the Rules of Origin (RoO): Review the specific RoO criteria outlined in the FTA text. According to these rules, goods must generally "originate" in India⁴ to qualify.
• Verify product compliance with RoO: Check if your product meets the specific RoO criteria, which could involve being Wholly Obtained in India, undergoing a required Change in Tariff Classification (CTC), or meeting a minimum Regional Value Content (RVC) percentage.
• Identify need for origin documentation: If your goods meet the criteria, confirm the specific origin documentation required by the FTA and the importing country to claim benefits. This is often a Certificate of Origin.

How to get a Certificate of Origin for export?

Once you've confirmed your goods meet the relevant Rules of Origin and require a Certificate of Origin (CoO), obtaining this official proof of origin certificate involves a specific process, often managed digitally.

Here are the typical steps for Indian exporters:

1. Register on the Common Digital Platform for Issuance of Certificates of Origin⁵: Exporters usually need to register on the Directorate General of Foreign Trade (DGFT)'s designated online platform for Certificate of Origin issuance (often referred to as the e-COO platform).
2. Prepare supporting documents: Gather necessary documents electronically. This typically includes the commercial invoice, packing list, shipping bill or bill of lading, and documented evidence demonstrating how your product meets the specific FTA's Rules of Origin criteria.
3. Submit online application: Log in to the digital platform and complete the e-CoO application form accurately, uploading the required supporting documents and providing details about the shipment and the specific FTA being utilized.
4. Await verification and issuance: The application is routed to the relevant issuing agency authorized under the specific FTA. They will review your submission for compliance with the requirements. Upon successful verification, a digitally signed e-Certificate of Origin is typically issued through the platform.

Leverage FTAs and expert support with DHL Express

We encourage Indian businesses explore these FTA opportunities proactively. With expert support, navigating the complexities of customs, documentation like the proof of origin certificate, and the overall international shipping process is simpler. DHL Express provides guidance through these trade regulations.

Open a DHL Express business account today to benefit from our expertise in handling customs documentation, understanding taxes on international shipments for landed cost calculations, and ensuring your goods meet FTA requirements for smoother, cost-effective delivery worldwide.