The government has asked Indian exporters to identify sectors and products where they can leverage free trade agreements (FTAs) to gain a competitive advantage over China and step up exports to partner markets, people aware of the matter said.
“Indian exporters often find it challenging to enter markets where China already has a dominant presence. For instance, China already had an FTA with Australia, which meant Indian exporters did not have a competitive advantage there. So, in such cases, exporters have been asked to identify sectors and products where they can leverage the FTA,” a source said.
China has FTAs with several countries and regions, including ASEAN, New Zealand, Chile, Peru, Switzerland, Maldives, Georgia, Hong Kong, Macao and Taiwan. It has also signed FTAs with South Korea and Australia, with the latter also containing an investment chapter.
India has signed trade agreements with several countries and regions in recent years, including the UAE, Australia, the UK and Oman, while negotiations are under way with countries such as Chile, Peru and the European Union. However, exports have not increased significantly in several FTA partner markets.
“There has been a huge communication gap. Even after FTAs, a large chunk of Indian exporters are not coming forward to tap these markets. Just having EPCs (export promotion councils) will not help. We are trying to ensure that even a small exporter is able to leverage an FTA,” a government official said.
The focus on product-level opportunities assumes significance as India continues to run trade deficits with several FTA partners. India’s trade deficit stood at $6.5 billion with Australia, $26.52 billion with the UAE and $3.14 billion with Oman.
In markets such as New Zealand, Australia and Switzerland, both India and China have FTAs. However, China’s exports to these markets are many times higher than India’s. For instance, China’s exports to Australia stood at $82.88 billion in 2025, compared with India’s $7.85 billion.
Exporters have also been asked to identify products specific to each state and district that can be positioned as areas of expertise in international markets. To prepare exporters and oversee the process, the government is also planning to set up a body comprising officials from the Directorate General of Foreign Trade (DGFT) and the Department of Commerce, along with representatives of export promotion councils and industry associations.
Following the One District One Product model, exporters have been encouraged to promote products where individual regions have a natural competitive advantage. For instance, exporters from the Northeast could promote bamboo handicrafts, while Panipat could leverage its strength in handlooms and textiles.
