Australia, UAE FTAs deliver gains for Indian exporters, but competition bites in many segments

India's done well on FTAs

India’s recent free trade agreements with Australia and the United Arab Emirates have produced a mixed—but largely encouraging—outcome, with Indian exporters gaining market share across a substantial portion of product categories, even as meaningful losses persist in several others.

A Moneycontrol analysis of post-FTA trade data shows that both agreements have helped Indian firms deepen their presence where competitiveness, scale and tariff preferences aligned—but have also exposed vulnerabilities in segments where these advantages were weaker.

Australia: Broad-based gains, but not universal

Since the Comprehensive Economic Cooperation and Trade Agreement (ECTA) came into force, India has strengthened its export footprint across a wide swathe of the Australian market.

India’s share of Australia’s imports rose by more than one percentage point in 857 product categories, covering nearly 79 percent of the total traded value analysed. In practical terms, this suggests that across most economically significant product lines, Indian exporters were able to leverage tariff concessions, clearer regulatory pathways and improved market access to expand their presence.

However, the gains were far from universal. In 2,072 product categories, India’s share of Australian imports declined by more than one percentage point. These setbacks point to areas where Indian firms may be struggling on pricing, product standards, logistics, or scale, or where domestic Australian producers and third-country suppliers have outperformed.

Sectorally, India recorded notable gains in passenger vehicles, diamonds and pharmaceuticals, while losing ground in categories such as cast articles of iron and steel, highlighting uneven competitiveness across manufacturing segments.

UAE: Larger market, tougher competition

India’s experience under the Comprehensive Economic Partnership Agreement (CEPA) follows a similar pattern, though with sharper competitive churn.

Indian exporters increased their import share by more than one percentage point in 1,597 product categories, accounting for about 61.5 percent of the total traded value examined. The gains are concentrated in sectors where India already had commercial depth and where tariff reductions amplified existing strengths—particularly manufactured goods, processed commodities and value-added segments.

At the same time, the UAE market has proven more competitive than Australia’s. In 2,564 product categories, India’s share fell by more than one percentage point, suggesting stronger competition from alternative suppliers and the challenges of sustaining momentum in a highly diversified, price-sensitive hub that is deeply embedded in global supply chains.

What the FTAs really show

Taken together, the data underscores a critical point: preferential trade agreements alone do not guarantee lasting export gains. While tariff elimination and improved access can deliver early advantages, sustained success depends on competitiveness, quality, scale, branding and supply-chain reliability.

The experience of Australia and the UAE suggests that FTAs can widen the playing field—but exporters still need to win on fundamentals to prevent erosion over time.

The findings come as India steps up its FTA agenda. Earlier this week, the government announced the conclusion of negotiations with New Zealand, with a deal expected to be finalised in the first half of 2026. India has also signed an FTA with Oman earlier this month.

As India expands its network of trade agreements, the lessons from Australia and the UAE are clear: FTAs open doors—but staying inside requires competitiveness well beyond tariff relief.