India has signed 18 Free Trade Agreements (FTA) with different countries, but its exports are not increasing accordingly. The Global Trade Research Initiative (GTRI) recommends that instead of signing new agreements, the focus should be on ensuring solid export benefits from existing agreements, especially in sectors such as electronics, engineering and textiles, where the potential for gains is greatest.
According to the report, India’s total exports reached US$825 billion in FY2025, but are expected to increase only marginally to around US$850 billion in FY2026. This limited growth is due to the impact of US tariffs. Merchandise exports are expected to remain unchanged due to weak international demand and increased protectionist measures, while services exports are expected to exceed US$400 billion, potentially supporting India’s overall trade performance.
India’s 18 FTA deals
GTRI reports that 18 free trade agreements (FTAs) have already been signed, and more are expected in 2026. Therefore, India’s priority should shift from signing agreements to realizing real export benefits from these FTAs. GTRI emphasizes that India is entering 2026 amid one of the most challenging global trade environments in recent years. Rising protectionism in developed economies, a slowdown in global demand, and new trade barriers related to climate change are coinciding with India’s efforts to increase exports. This results in greater focus on maintaining existing market position rather than expanding it.
Tariffs biggest pressure point
The United States has emerged as an important pressure point. Donald Trump imposed heavy tariffs unilaterally, bypassing the rules of the World Trade Organization. Between May and November 2025, India’s exports to the US fell by nearly 21 percent due to the existing 50 percent tariff.
Further decline in exports possible
GTRI has warned that unless the US withdraws the additional 25 per cent punitive tariff imposed on India for buying oil from Russia or a trade agreement is reached, exports to India’s biggest market could fall further.
challenge from Europe also
Europe presents a different challenge. The EU will implement its Carbon Border Adjustment Mechanism from January 1, 2026, which will impose a carbon tax on imports. Even before the implementation of this tax, India’s steel exports to the EU have declined by about 24 percent. However, despite these challenges, the report shows signs of strength. Despite the decline in exports to the US, shipments to other global markets have increased by about 5.5 percent. GTRI stressed that with limited influence on global geopolitics, India should focus on its domestic market.