One key driver behind this trend has been to create supply chain resilience and reinforce “friend shoring,” with an emphasis on trade with trusted geopolitical and political partners. Thus, these new-generation FTAs are not just devices for tariff concessions but are increasingly being positioned as comprehensive partnerships aimed at fostering trade, investment, technology collaboration, and sustainable economic growth —standing in contrast to coercive trade practices.
Equally relevant is the balance these trade agreements have sought to create between market access/concessions, regulatory safeguards, and the protection of domestic industry. These agreements reflect a more forward-looking approach, where long-term economic gains are founded on reciprocal benefits, measured concessions, and adequate safeguards to ensure that no particular sector or industry is excessively disadvantaged. In March 2024, India signed the India‑EFTA Trade & Economic Partnership Agreement with Switzerland, Iceland, Norway and Liechtenstein, underscoring India’s shift toward high‑standard, plurilateral deals that lower trade barriers and stimulate investment.
Building on this momentum, India signed the Comprehensive Economic Trade Agreement (CETA) with the United Kingdom in July 2025, which entered into force on July 15, 2026, to enable near-zero duty access to 99% of Indian exports to the UK, which is expected to significantly expand trade in textiles, engineering goods, services, and professional mobility. Meanwhile, the India–EU FTA covers not only market access but also rules of origin, customs and trade facilitation, digital trade, intellectual property, sustainable development, good regulatory practices, and carbon border adjustment measures. India has further complemented these deals with agreements with the UAE, Australia, New Zealand and is advancing talks with Oman and other partners.
Despite the commercial focus on tariffs, FTAs do not guarantee automatic concessions and rebates and have historically been part of a conditional regime, where establishing “origination” under the applicable rules of origin, documenting it, and withstanding verification is the most critical part. All FTAs, through their prescribed product-specific rules of origin, either require goods to be wholly produced or require products to undergo substantial transformation to access preferential treatment.
In addition, these new-age tariff concessions also prescribe quota restrictions/limits for certain sensitive goods to protect domestic manufacturers/producers’/ farmers and prevent the dumping of such goods in partner countries, thereby limiting access to concessional rates to a certain few on a first cum first served basis. Hence, the real commercial benefit accrues only to those businesses that are operationally prepared to claim, defend and sustain preferential treatment.
Given the above, the rules of origin and the processes around them are the major areas that require preparedness from exporters and importers. Multi-country trades have led to complex sourcing models involving multi-country processing and varied distribution models. Considering these intricacies, the last country of processing or export cannot be presumed to be the originating country. All FTAs require a change in tariff classification and/or a minimum regional value content or a combination of these tests to satisfy the origination criteria and prevent circumvention.
Consequently, prior to export or import, it is critical to map input origins, tariff classifications, bill of materials, value addition, and manufacturing processes. Another crucial aspect to guarantee a claim is customs documentation, or more succinctly, the proof of origin to be produced before the importing country’s customs authorities. More FTAs are moving towards self-declaration by exporters; however, this trust-based system requires pre-verification by the issuing country’s authorities, which would require exporters to undertake the necessary application process to ensure they are bestowed with “authorised exporter” status. Alternatively, even the agency-issued origin certificate needs to meet the prescribed criteria to withstand the necessary scrutiny.Preferential origin claims are also increasingly subject to post-import verification by customs authorities. Most recent FTAs incorporate mechanisms for advance validation, information exchange, and a post-import verification system of the origin claims, which requires exporters and importers to allow access to the authorities to audit their processes and to maintain critical information for about five years. Businesses must therefore create internal FTA control files containing supplier declarations, cost sheets, production records, HS classification support, transport documents, contracts, invoices and reconciliation between declared origin and actual sourcing patterns.
Further, any supply chain restructuring to avail the FTA benefit would also require deep consideration. India’s new FTAs create an opportunity to rethink manufacturing location, vendor selection, product engineering and regional distribution. For example, the Annex 2C benefit under the India-New Zealand FTA ensures duty-free import of inputs [even restricted category items] by Indian importers from NZ, which can then be strictly utilised for manufacture of export products. Conversely, importers may need to evaluate and rethink supply chains based on whether a specific FTA gives them more direct benefit than another. These decisions would involve not just factoring in duty costs but also logistics and compliance costs, non-tariff measures, lead times, currency risks, contractual tractability, and customs audit risks.
Another important consideration for multinational groups is the impact that any supply chain restructuring may have on transfer pricing policies and customs valuation. Changes in sourcing, manufacturing locations, distribution models, or inter-company flows can alter the functional and risk profile of group entities, necessitating a reassessment of transfer pricing arrangements, benchmarking outcomes, and adjustments to pricing mechanisms that affect the declared transaction value.
The new generation FTAs require a shift in the business mindset, where FTAs are not viewed as standalone trade concessions, but as a strategic advantage that extends beyond tax planning and also impacts supply chain design, market-entry decisions, procurement, manufacturing, investment decisions, and transfer pricing, allowing businesses to not just trade more but smarter. Concessions improve market accessibility, but only robust governance, documentation and compliance framework and readiness determine who can convert these concessions into economic value.
—The author, Meetika Baghel, is Partner, Aurtus Legal LLP. The views are personal.