In today’s age of global commerce, Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) have become increasingly important in advancing India’s economic relationship with the world to a new high. The agreements enable Indian exporters and importers to access overseas markets at lower tariff rates, simplify customs clearance, and establish long-term business opportunities.
Being international logistics and compliance experts, Afleo Logistics ensures that Indian companies navigate and gain from these trade arrangements. This manual offers you a closer look at India’s PTAs and FTAs of 2025 and how you could utilize them to your advantage.
What is the Difference Between FTA and PTA?
Free Trade Agreements (FTAs) are bilateral trade agreements among nations in which they reduce or abolish tariffs and non-tariff barriers on most trade in goods and services. FTAs tend to address intellectual property, investment, competition, and electronic commerce.
Preferential Trade Agreements (PTAs) are more limited in scope. They grant tariff concessions on a listed variety of products but not as extensively as FTAs. PTAs are a transitional phase to broader FTAs.
For a deeper understanding, check our blog on Free Trade Agreements and Their Global Impact.
Key Difference
- FTAs = Greater trade liberalization, wider product scope
- PTAs = Constricted preferences, constricted lists of products
Advantages of FTA and PTA Agreements for Indian Businesses
Selling on FTAs and PTAs can unlock a treasure trove of opportunities for Indian companies:
Lower Tariffs
Imports or exports via FTAs/PTAs are subject to less or no customs duty, making Indian products more appealing in foreign markets and lowering input costs for producers.
New Geographies Access
Trade agreements bring access to hitherto inaccessible or high-tariff regions, and small and medium enterprises (SMEs) can access opportunities to grow abroad.
Export Growth Boost
Exporters can capitalize on Indian products like textiles, pharma, auto components, engineering goods, and IT services.
Increased Investment Flow
Since there is more economic cooperation, nations can achieve an improved investor mood and foreign direct investment (FDI) possibilities.
List of India’s FTA Agreements (As of 2025)
Below is a snapshot of India’s key FTAs that it has signed, along with their respective dates of implementation and focus sectors:
1. India-ASEAN FTA (In operation since 2010)
- Includes goods and services
- Partners: 10 ASEAN nations
- Focus sectors: textiles, chemicals, electronics, machinery
Read our in-depth guide to the ASEAN-India Free Trade Area (AIFTA) for sector-specific advantages and market access tips.
2. India-Japan CEPA (Comprehensive Economic Partnership Agreement – since 2011)
- Waives duties for 94% of traded goods
- Focus: machinery, auto components, organic chemicals, seafood
3. India-South Korea CEPA (since 2010, upd. 2017)
- Improved market access in IT, engineering, and steel
- Assumes a pivotal role for electronics and automobile exports
4. India-UAE CEPA (Effective from May 2022)
- More than 90% of Indian exports to the UAE benefit from duty-free entry
- Promotes gems & jewellery, textiles, leather, engineering trade
5. India-Australia ECTA (Entered into force in Dec 2022)
- Removes tariffs on more than 85% of Indian exports to Australia and 96% of Australian exports to India
- Facilitates trade in pharmaceuticals, textiles, engineering, and education
6. India-Mauritius CECPA (2021)
- Covers 310 Indian export items and 615 Mauritian export items in a detailed manner
- Covers goods, services, investment, professional movement trade
Other FTAs Under Way:
- India-Nepal Treaty of Trade
- India-Sri Lanka FTA
- India-Bhutan Trade Agreement
- India-Thailand Early Harvest Scheme
Every FTA contains a Rules of Origin clause-compliance is mandatory for benefit utilization.
India’s List of PTA Agreements
PTAs are preferential tariffs with the exclusion of the entire trade volume or even product groups. India’s major PTAs are:
1. India-MERCOSUR PTA (Signed 2004, came into effect 2009)
- Partners: Brazil, Argentina, Paraguay, Uruguay
- Over 450 Indian products have duty concessions
- Main exports: drugs, textiles, machinery
2. India-Chile PTA (Signed 2005, enlarged 2017)
- Indian exporters get benefits from 1031 products with concessions
- Industry sectors covered: chemicals, pharmaceuticals, engineering, food processing
Future or Under-Negotiation Trade Agreements (2025 Prospects)
India is currently negotiating or under negotiation for various strategic trade agreements in 2025, such as:
- India-EU FTA (BTIA) – Under negotiation since 2007, renewed in recent years
- India-UK FTA – Negotiations ongoing, relating to pharmaceuticals, whisky, automobiles, IT
Discover the benefits, challenges, and opportunities of the India-UK Free Trade Agreement for Indian exporters and importers.
- India-GCC FTA – Negotiations ongoing; includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE
- India-Canada CEPA
- India-Eurasian Economic Union (EAEU)
Note: These FTAs are going to be crucial in redefining India’s international trade profile in the next few years.
How to Derive Maximum Benefit from FTAs and PTAs for Import-Export Gain
To take maximum benefit out of such deals, firms need to plan their trading activities well. This is the way to do it:
1. Properly Classify Products
Utilize proper HS (Harmonized System) code for eligibility under the concerned FTA/PTA.
2. Preferential Duty with Certificate of Origin (CoO)
Obtain a CoO from authorized agencies such as DGFT or export councils in order to receive concessional duty.
See our complete breakdown of the SAFTA Certificate of Origin process in India to ensure compliance and avoid delays.
3. Follow Country-Specific Concessions
Every FTA/PTA mentions a list of products included. Keep oneself updated with tariff schedules, quotas, and rules of origin.
4. Improve Supply Chain
Import raw materials at preferential tariffs from FTA/PTA nations and export value-added products competitively.
5. Collaborate with Trade Compliance Experts
Afleo Logistics walks you through documentation troubles, CoO issuance, and customs clearance.
Key Documents and Compliance Issues
To be able to benefit from FTA/PTA, companies need to have proper records:
- Certificate of Origin (Preferential) – Establishes goods originated in India
- Commercial Invoice & Packing List – Shall mention the description of the product as per the tariff schedule
- Bill of Entry / Shipping Bill
- Rules of Origin Declaration – Verification against terms of origin (e.g., wholly obtained or substantial transformation)
- Product-Specific Documentation – As required by agreement (e.g., proof of value addition)
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