{"id":90520,"date":"2026-06-12T00:00:00","date_gmt":"2026-06-12T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/mena-india\/?p=90520"},"modified":"2026-06-12T09:46:18","modified_gmt":"2026-06-12T09:46:18","slug":"indias-new-ftas-face-deficit-test-and-low-utilization-rates-says-gtri","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/mena-india\/2026\/06\/12\/indias-new-ftas-face-deficit-test-and-low-utilization-rates-says-gtri\/","title":{"rendered":"India's new FTAs face deficit test and low utilization rates, says GTRI"},"content":{"rendered":"

Gulf FTAs face deficit test:<\/strong> India’s expanding trade architecture with the Gulf countries is running into a wall of growing trade deficits and low exporter utilization, according to a Global Trade Research Initiative (GTRI) report (pdf<\/a>). While New Delhi has successfully rolled out Comprehensive Economic Partnership Agreements (CEPA) with UAE, Oman, Australia, Mauritius and the European FreeTrade Association (EUFTA), these new FTAs are coming under scrutiny for putting pressure on domestic manufacturers without delivering proportional export gains.<\/p>\n

By the numbers:<\/strong> The UAE, Australia, Mauritius and EUFTA countries accounted for 11.9% of India’s exports and 14.1% of imports in 2025 closing a cumulative trade deficit of USD 50 bn, GTRI says.<\/p>\n

The India-UAE CEPA came into effect in 2022<\/strong> and the India-Oman CEPA was implemented in 2026. India is also negotiating a wider Gulf Cooperation Council (GCC) agreement, making GTRI’s concerns relevant for the next phase of India-Gulf trade policy as New Delhi tries to expand Gulf market access while managing faster import growth and low use of FTA benefits by Indian exporters<\/p>\n

Why are imports outpacing exports?<\/strong> Many of India’s FTA partners already maintained low import tariffs before signing the pacts. Average most-favored-nation (MFN) tariffs sit below 4% in the UAE, Japan, Australia, and Malaysia, and hover close to zero in Singapore. In contrast, India’s MFN tariff stands at a much higher 12.6%. This asymmetry means partner-country exporters enjoy a far more substantial tariff reduction when entering the Indian market than Indian exporters receive when shipping abroad.<\/p>\n

Utilization remains low:<\/strong> Only 20-30% of India’s eligible exports use FTA preferences, compared with 60-70% utilization by exporters shipping to India. Indian exporters often avoid FTA preferences because the administrative burden — including rules-of-origin compliance, certification, and extensive documentation costs — often outweighs the actual tariff savings.<\/p>\n

Manufacturing pressure:<\/strong> FTAs have worsened India’s inverted duty structure by allowing finished goods from partners including the UAE, ASEAN, Japan, South Korea and Australia to enter India at low or zero duty, while Indian manufacturers continue to pay higher duties on inputs.<\/p>\n

The GTRI is calling for an immediate overhaul of India’s tariff schedule to eliminate inverted duty structures on industrial inputs.<\/strong> It also recommends tighter monitoring of import surges, trade deficits, and FTA utilization rates. Crucially, the policy think tank recommends the government of India to prioritize the mutual recognition of standards, testing, and conformity assessments to eliminate the non-tariff barriers currently holding back Indian exporters.<\/p>\n","protected":false},"excerpt":{"rendered":"

India\u2019s trade push is expanding through the UAE and Oman CEPAs, but GTRI warns that newer FTAs are facing a trade deficit and less utilization<\/p>\n","protected":false},"author":0,"featured_media":90521,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2603],"tags":[2544,2614,2659,2467,2602],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-90520","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy-watch","tag-exports","tag-fta","tag-india-gcc-corridor","tag-policy","tag-policy-watch","wpautop","entry"],"acf":{"full_issue_title":"India's new FTAs face deficit test and low utilization rates, says GTRI","teaser":"India\u2019s trade push is expanding through the UAE and Oman CEPAs, but GTRI warns that newer FTAs are facing a trade deficit and less utilization","mongo_id":"23ded3414eb479811676e325","order":"5","related_issue":[90509],"story_type":"1"},"yoast_head":"\nIndia's new FTAs face deficit test and low utilization rates, says GTRI - 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