Government Urges Industry to Leverage Free Trade Agreements and Diversify Export Markets

A senior commerce ministry official has called on Indian industries to actively utilize free trade agreements, focus on value addition, and build resilient supply chains. The address highlighted the shift toward commercial nationalism globally and positioned India as a secure alternative for manufacturing.

Speaking at a manufacturing conclave on Thursday, Additional Secretary in the Department of Commerce Yashvir Singh urged the industry to maximize the potential of existing free trade agreements (FTAs). He emphasized that trade pacts serve as market access doors that businesses must actively walk through to expand operations and secure preferential tariffs.

Singh outlined five strategic imperatives for the manufacturing sector. These include investing in FTA utilization, understanding rules of origin requirements, moving up the value chain, building supply chain resilience, actively diversifying export markets, and engaging on technical standards.

According to the commerce ministry, the share of capital goods in India's export basket has increased from 13 percent in 2014 to 19 percent currently, a trajectory that officials expect the sector to accelerate. Singh pointed out that India's trade pacts with countries like Oman, New Zealand, and Mauritius have opened new corridors in the Gulf, Oceania, and East Africa.

Addressing global trade dynamics, Singh noted that the era of frictionless, ideology-neutral free trade has shifted toward what he described as 'Vyaparik Rashtravad' or commercial nationalism, where trade instruments function simultaneously as economic tools and geopolitical levers. He cited the heavy concentration of manufacturing and critical mineral processing in China as a primary risk for global supply chains, while presenting India as a reliable and transparent partner.

He also highlighted India's foundational strengths, pointing to digital public infrastructure such as UPI and ONDC, democratic institutions, a young workforce, and enforceable contracts as key drivers for strengthening the country's position in global value chains.

"The government's push for businesses to leverage free trade agreements and build supply chain resilience highlights a crucial shift in global commerce. For Indian startups and manufacturing enterprises, this means looking beyond domestic markets and aligning operations with global standards, rules of origin, and value-added production. Diversifying supply chains and utilizing trade corridors effectively will be essential for scaling businesses sustainably in an increasingly competitive international trade environment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes