Exporters Back PM’s Call For MSMEs To Leverage India’s Expanding FTA Network

New Delhi, Aug 17 (KNN) Prime Minister Narendra Modi's call for micro, small and medium enterprises (MSMEs) to leverage India's expanding free trade agreement (FTA) network has received support from exporters, who said preferential market access could help smaller businesses expand their global footprint.

Industry representatives said the key challenge is turning FTA tariff concessions into actual export orders and deeper integration with global value chains.

Addressing the nation on Independence Day, Modi said India has concluded FTAs with around 40 countries since 2014 and urged MSMEs to tap overseas opportunities, particularly in textiles, machinery and pharmaceuticals. 

India has also expanded trade ties with the UAE, Mauritius, Australia, the UK, EFTA and Oman, while agreements with the EU and New Zealand have been finalised, reported Money Control.

Exporters Back Push For MSMEs To Leverage FTAs

Aqeel Panaruna, former Chairman of the Council for Leather Exports, said the government's focus on FTAs and the foreign trade policy was creating new opportunities for exporters.

The Federation of Indian Export Organisations (FIEO) also backed the call but emphasised the need for greater awareness among MSMEs about how to effectively use trade agreements.

“FTAs are not merely about tariff concessions; they provide MSMEs a gateway to integrate with global value chains, access larger markets and enhance their competitiveness,” FIEO Director General Ajay Sahai said.

MSMEs Need Greater Awareness Of FTA Benefits

He said preferential market access would be meaningful only if MSMEs could convert it into actual export orders. FIEO plans to help MSMEs understand rules of origin, regulatory standards and market-specific requirements needed to access preferential tariffs.

Industry representatives said MSME participation is crucial to India's export ambitions, with the sector accounting for around 35.4 percent of manufacturing output, 48.58 percent of exports and 31.1 percent of GDP. The sector has over 7.47 crore enterprises employing more than 32.82 crore people.

FTA Gains Extend Beyond Tariff Concessions

FTAs offer exporters preferential market access by reducing or eliminating import duties on eligible goods. For MSMEs, the benefits could go beyond tariff savings by improving product quality, compliance with global standards and export capacity.

Greater market access could also help smaller firms become suppliers to multinational companies and integrate into global supply chains. Exporters said the priority now is to equip MSMEs with the information, capabilities and market linkages needed to convert preferential access into sustained exports.

(KNN Bureau)