FTA impact: India sees export uptick in trade with Australia, UAE

New Delhi: In a move that reflects India’s policy emphasis on boosting exports through free trade agreements (FTAs), the country’s trade pacts with Australia and the United Arab Emirates (UAE) are beginning to deliver visible outcomes.

A sharp rise in the issuance of Preferential Certificates of Origin (CoO) to Indian exporters during FY25 signals growing utilisation of tariff concessions under the free trade pacts.

A Preferential Certificate of Origin is a paper that shows where a product was made, so that it can get lower taxes when shipped to another country under a trade deal.

According to a commerce ministry report reviewed by Mint, preferential Certificates of Origin (CoOs) issued under the India-Australia Economic Cooperation and Trade Agreement (ECTA) rose to 77,234 in FY25, marking a 19.1% increase from 64,864 in FY24. The momentum continued into the first two months of FY26, with April and May 2025 registering year-on-year growth rates of 13.3% and 7.4%, respectively.

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For Australia, 5,643 CoOs were issued in April 2024, rising to 6,395 in April 2025. Similarly, 6,125 CoOs were issued in May 2024, which rose to 6,580 in May 2025.

These certificates, which allow exporters to access lower or zero duties in partner countries, saw strong growth under both the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) and the India-UAE Comprehensive Economic Partnership Agreement (IUCEPA), highlighting deeper integration into partner markets and increasing awareness among exporters.

The steady climb reflects a strengthening trade relationship and growing awareness among Indian exporters of the agreement’s benefits, particularly in sectors such as textiles, leather, gems and jewellery, and engineering goods, where tariff concessions are actively utilised.

The rise was even more pronounced under the IUCEPA (UAE), where CoO issuances jumped by 24.7%, from 98,104 in FY24 to 122,306 in FY25. In April 2025 alone, 11,825 certificates were issued—35.4% higher than the same month last year. May figures followed suit, with a 28.3% increase over the previous year to 11,507.

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A senior commerce ministry official attributed the sharp increase to greater clarity on documentation procedures, faster processing timelines, and rising demand from UAE-based buyers for Indian products including food items, machinery, electricals, and chemicals.

While addressing a press conference on 16 June, outgoing commerce secretary Sunil Barthwal said that the department is examining the impact of FTAs that have already been signed, especially as several new ones have been concluded in recent years. He noted that there is now a greater thrust on ensuring a higher rate of realisation from these agreements.

The broader trend is evident at the national level as well, albeit at a more moderate pace. Across all FTAs, India issued 720,996 preferential Certificates of Origin in FY25, marking a 5.3% increase from 684,724 in FY24. The upward trajectory continued into the first two months of FY26, with total CoOs rising by 12.3% in April—from 61,400 in April 2024 to 68,939 in April 2025—and by 6.7% in May, increasing from 59,198 in May 2024 to 63,177 in May 2025, according to the report.

However, the uptick under the pacts with Australia and UAE far outpaced the national average, indicating that these two trade deals are gaining relatively stronger traction among Indian exporters.

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The numbers mirror developments in bilateral trade. India-UAE trade stood at $84.84 billion in FY24, maintaining the UAE’s position as India’s third-largest trading partner. Exports to the UAE were valued at $31.61 billion, while imports crossed $53.23 billion. In comparison, India-Australia trade touched $26.4 billion in FY24, with Indian exports growing by over 10% to reach $7.94 billion, while imports stood at $18.49 billion, dominated by coal, minerals, and education-related services.

Trade experts believe the trend is likely to strengthen further in the coming quarters, especially as India concludes negotiations on additional FTAs with the UK and the EU.

In FY25, exports increased to $8.58 billion while imports stood at $15.53 billion, keeping the total trade at $24.1 billion. Before the signing of the trade deal, in FY23, India’s exports to Australia were $6.95 billion and imports were higher at $19.01 billion, pushing the total bilateral trade that year to $25.96 billion.

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Similarly, India’s exports to the UAE stood at $31.61 billion and imports at $53.23 billion in FY23, taking the total bilateral trade to $84.84 billion.

After the signing of the trade agreement, exports rose to $35.63 billion and imports moderated to $48.03 billion in FY24, resulting in bilateral trade of $83.66 billion. In FY25, trade volumes expanded further, with exports increasing to $36.64 billion and imports surging to $63.42 billion, pushing the total bilateral trade to $100.06 billion.

India currently has 13 major operational trade agreements, including FTAs, CECAs, and CEPAs, with partners such as Asean, Japan, South Korea, Singapore, Malaysia, Thailand. In South Asia, it has trade pacts with Sri Lanka, Nepal, Bhutan, and Afghanistan, and beyond the region, with Mauritius, the UAE, and Australia.