India’s emerging generation of Free Trade Agreements (FTAs) is expected to play a key role in accelerating manufacturing growth, reviving private investment, and strengthening global supply-chain linkages. According to Yes Securities, sectors such as electronics, pharmaceuticals, and engineering and machinery are likely to benefit the most from these trade deals. When combined with Production-Linked Incentive (PLI) schemes and the global “China+1” strategy, these agreements could significantly improve India’s chances of reaching $1 trillion in merchandise exports by 2030.

The report highlights that India’s recent FTAs signal a major shift in economic policy—from a cautious, protectionist stance to a more open and globally integrated trade strategy. Yes Securities noted that these agreements go beyond tariff reductions and should be seen as the foundation of a long-term industrial expansion and export-driven growth cycle.

India’s trade partnerships with countries and regions including the UAE, Australia, the UK, EFTA, Oman, New Zealand, and the European Union are being developed alongside infrastructure improvements such as industrial corridors, upgraded ports, and localized supply chains. According to the brokerage, this combination places India among a small group of economies capable of handling large-scale manufacturing relocation, supported by its workforce size and domestic market strength.

A major expected impact of these FTAs lies in boosting investment. Yes Securities argues that one of their strongest advantages is the potential to revive India’s sluggish private capital expenditure cycle. With capacity utilization at around 75%, many firms remain hesitant to invest heavily. However, stronger export demand generated through FTAs could improve factory utilization, increase economies of scale, and eventually encourage higher private investment—similar to the export-led growth models seen in several East Asian economies.

Services are also expected to remain a strong growth driver. India aims for $2 trillion in total exports by 2030, with an even split between goods and services. The report suggests that agreements with the UK and the EU could expand opportunities for IT services, consulting, engineering R&D, and financial services, reinforcing India’s global advantage in skilled labor and knowledge-based industries.

The brokerage also warns that trade access alone will not guarantee success. It emphasizes that India’s bigger challenge lies in improving domestic competitiveness. Merchandise export growth has remained modest at about 3.5% CAGR between 2015 and 2025. Persistent issues such as high logistics costs, expensive electricity, regulatory complexity, and relatively low productivity continue to act as barriers. Without structural reforms, FTAs could even widen trade deficits if imports grow faster than exports.