According to a Global Trade Research Initiative (GTRI) June 2026 assessment, Indian exporters are using duty concessions on only 20%-30% of eligible exports, while it is 60%-70% for partner countries. It is regrettable that concessions accorded are being consumed and concessions won remain underutilised.

Although the government has signed various free trade agreements in the past, the quest for such pacts accelerated with the weakening of the World Trade Organization (WTO) and the desire to push exports amid increasing geopolitical tensions. 

Gradual Weakening Of WTO

On 30 March 2026, the WTO’s 14th Ministerial Conference closed in Yaoundé, Cameroon, without a ministerial declaration. Its Chairperson, Cameroon’s Trade Minister Luc Magloire Mbarga Atangana, offered the plainest of epitaphs: they had run out of time. What survived was a chairperson’s summary, a handful of narrow decisions, a draft reform declaration deferred to MC15 — and the collapse of consensus on the moratorium on customs duties on electronic transmissions, unbroken since 1998 and now allowed to expire.

India, it should be said, had long argued against renewing that moratorium.

Twelve weeks later, on 15 July 2026, the India-UK Comprehensive Economic and Trade Agreement (CETA) entered into force. The juxtaposition is the story of our trading age. What Geneva can no longer deliver by consensus among 166 members, two capitals now settle between themselves, one deal at a time.

For half a century after 1948, the General Agreement on Tariffs and Trade did something remarkable: it made tariff reduction a collective, rule-bound, non-discriminatory enterprise. Its animating principle — most-favoured-nation treatment — held that a concession granted to one trading partner was owed to all. Eight negotiating rounds reduced average industrial tariffs in the developed world from punitive to nominal.

The WTO, born on 1 January 1995, was the apex of that project. It brought services, intellectual property and agriculture inside the tent, and — its true innovation — gave the system teeth: a binding two-tier dispute settlement mechanism with a standing Appellate Body whose rulings members were obliged to accept. For the first time, a small economy could take a superpower to court over trade and win.

That architecture has been dismantled in stages. The Doha Development Round, launched in November 2001 with a mandate to rebalance the system towards developing countries, never concluded; a quarter-century on, it is spoken of in the past tense. More consequentially, from December 2019, the Appellate Body ceased to function altogether, its membership reduced to below quorum by a sustained US refusal to approve new appointments. A losing party could henceforth appeal “into the void” — into a body that could not hear it. Enforcement, the WTO’s one irreplaceable asset, simply stopped.

The stopgap is telling. A Multi-Party Interim Appeal Arbitration Arrangement (MPIA) now binds around 60 members — the EU, China, Japan, Canada, Brazil, Australia, the UK, Singapore, and others. India is not among them.

When the Rules Went Bilateral

The WTO’s own database counted 386 regional trade agreements in force as of 11 August 2026, out of 638 ever notified to the GATT/WTO. The preferential exception has swallowed the MFN rule. 

US President Donald Trump’s tariff campaign then converted a slow drift into a stampede. 

Its “reciprocal” tariff architecture — country-specific rates set outside the WTO schedule and adjusted by executive fiat — made bilateral bargaining the only game available.

India felt this acutely: a punitive 50% wall on its goods, comprising a 25% reciprocal tariff and a further 25% penalty tied to purchases of Russian crude.

In early February 2026, New Delhi and Washington concluded an interim framework, set out in a White House fact sheet on 9 February. The additional 25% penalty was withdrawn against India’s commitment to stop buying Russian oil, and the reciprocal rate was cut from 25%-18%. 

Gems and diamonds, pharmaceuticals, smartphones, tea, coffee, handicrafts, and select farm goods received zero-duty entry; steel and aluminium remain subject to Section 232 national-security tariffs. India offered limited access to American dried distillers’ grains, sorghum, and soybean oil while ring-fencing dairy, rice, and millets, and signalled its intent to purchase over US$500 billion in American energy, technology, and coking coal.

The full Bilateral Trade Agreement remains unsigned.

Note what this is: not a trade agreement in the WTO sense, but a negotiated tariff settlement. That is the new normal.

Add the older stock, and the Global Trade Research Initiative’s June 2026 count applies: 15 implemented agreements covering 27 countries, with nine more pending or under negotiation covering another 42 — together some 69 countries taking over three-quarters of India’s exports. Canada, Israel, Peru, the Gulf Cooperation Council (GCC), and the Eurasian Economic Union are in the queue; the ASEAN-India Trade in Goods Agreement review, meant to close in 2025, has slipped again.

This is from a country that walked out of the Regional Comprehensive Economic Partnership in November 2019.

Has the Basket Actually Grown?

Partly, and unevenly. India's total exports of goods and services reached a record US$860.09 billion in FY 2025-26, up 4.22% from US$825.26 billion. But the composition is revealing: merchandise exports crawled 0.93% to US$441.78 billion, while services surged 7.94% to US$418.31 billion.

Imports rose 6.47% to US$979.40 billion, widening the overall deficit from US$94.66 billion to US$119.30 billion.

Where pacts are mature, the numbers are good. India-UAE trade crossed US$100 billion in FY 2024-25, with the partners now targeting US$200 billion by 2032.

India-UK trade of about US$56 billion is meant to double by 2030, with the CETA delivering zero duty on roughly 99% of India’s exports to Britain and access across 137 services sub-sectors.

The EU pact covers a goods relationship worth US$136.54 billion in 2024-25 and promises to strip tariffs of up to 10% from some US$33 billion of labour-intensive exports.

New Zealand, a modest US$1.3 billion market, has offered duty-free entry on 100% of India’s exports and 5,000 skilled-worker visas a year.

The tell, though, is that the record export year coincided with a record deficit — and that China, with which India has no trade agreement at all, became its largest trading partner in FY26, with imports of US$131.63 billion and a bilateral deficit of US$112.16 billion.

The Challenges

Utilisation remains the weak link. GTRI’s June 2026 assessment finds Indian exporters use FTA preferences on only 20%-30% of eligible exports, while partner-country exporters shipping into India use them at 60%-70%.

Concessions given are consumed; concessions won are left on the table. The reasons are prosaic — certificate-of-origin paperwork, CAROTAR verification risk, and Micro, Small, and Medium Enterprises (MSMEs) that do not know the preference exists.

The tariff arithmetic is asymmetric by design. India’s average MFN tariff is about 12.6%, ranging up to 150%; partners such as Singapore, Japan, Australia, and the UAE already apply near-zero or sub-4% duties. India, therefore, concedes far more headroom than it gains.

The inverted duty structure quietly punishes manufacturing. Raw materials and intermediates attract 7.5%-10% duty while finished goods enter free under a pact — an incentive to import the product rather than make it.

The deficits are structural, not cyclical. GTRI puts the average annual trade gap with ASEAN, Japan, and Korea at roughly US$62 billion. Rules-of-origin leakage, with third-country goods acquiring minimal value addition en route, is a persistent complaint in the stalled AITIGA review.

Services wins remain on paper. Mutual recognition agreements for professional qualifications, visa quotas and data-flow commitments are signed but under-operationalised.

And non-tariff walls — the EU’s Carbon Border Adjustment Mechanism and deforestation regulation foremost — can erase a hard-won tariff concession without touching a tariff schedule.

The Structural Fixes

Firstly, run an FTA Utilisation Mission. A single DGFT-run digital origin portal, zero-cost electronic certificates, sector-wise MSME handholding, and an annual published utilisation rate for every agreement. What is not measured is not used.

Secondly, fix the inverted duty structure in the Budget. Align input tariffs to the bound output tariff under each pact, so domestic value addition is never the costlier option.

Then negotiate rules of origin with teeth, before signature. Product-specific value- addition thresholds, digital verification with partner customs, and no more post-hoc reviews of a rule that should have been right at the start.

Further, build an implementation architecture. Every pact needs a joint committee with a fixed calendar, a review clause with real consequences, and a statutory annual report to Parliament on outcomes, not intentions.

Subsequently, professionalise the negotiating cadre. Nine agreements in five years have been carried by a thin bench. A permanent trade-negotiation service, backed by an independent ex-ante and ex-post impact assessment body, is overdue.

Finally, do not abandon Geneva. Bilateral webs cannot discipline subsidies, industrial overcapacity or carbon border taxes. Joining the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), engaging the plurilateral tracks on e-commerce and investment facilitation, and pressing for restoration of the Appellate Body cost little and preserve the only forum where a middle power’s legal case counts equally.

India has bought insurance against a broken system, and it was the right thing to do. But a signed agreement is not an earned export. Until the utilisation rate climbs from 20%-30% towards what our partners routinely achieve, the pact spree will remain a diplomatic achievement in search of a commercial one.

(The writer is a former civil servant. Views expressed are personal.)