CII Report: FTAs, AI and ESG Critical to Strengthening India's Global MSME Trade Competitiveness

New Delhi, Jul 27 (KNN) Greater utilisation of Free Trade Agreements (FTAs), technology-led expansion of the services sector, and adoption of sustainability practices will be critical to strengthening India's global trade competitiveness, according to the Confederation of Indian Industry's (CII) latest International Trade Policy report.

Prepared in partnership with the Centre for Research in International Trade, including the Centre for Trade and Investment Law (CTIL) and the Centre for WTO Studies (CWS), the report identifies three strategic frontiers that will shape India's trade trajectory as it seeks to expand exports and strengthen its position in global value chains.

FTAs Offer Opportunities, MSMEs Face Utilisation Challenges

The report said FTAs are central to India's goal of achieving USD 1 trillion in exports, with recent agreements and ongoing negotiations expected to expand market access. 

However, it noted that MSMEs continue to face challenges in fully utilising FTAs due to limited awareness of compliance and documentation requirements. 

It also identified export opportunities in sectors such as bamboo, technical textiles, handloom, handicrafts, cement, spices and food processing, while highlighting concerns over cheap imports, logistics costs and compliance barriers. 

To improve export readiness, CII has launched a capacity-building guide, Going Global: A Practical Guide for Indian MSMEs. 

AI, GCCs and AVGC Sector to Drive Services Growth

The report highlighted the growing role of the services sector, which contributes around 55 percent of India's GDP, with AI, Global Capability Centres (GCCs) and the AVGC sector driving services exports. 

It noted that India hosts over 1,800 GCCs, a number expected to reach 5,000 by 2030, and called for stronger industry-academia collaboration, better infrastructure, higher R&D investment and stable tax policies to support expansion. 

The report also identified the AVGC sector as a key growth area, emphasising the need to develop original intellectual property while balancing AI adoption with employment generation. 

ESG Compliance Key to Future Trade Competitiveness

On sustainability, the report said ESG standards are becoming increasingly important for global market access and participation in international value chains. 

It urged MSMEs and agricultural enterprises to strengthen ESG compliance, environmental monitoring and supply chain documentation. 

According to CII, India's long-term trade competitiveness will depend on effectively leveraging market access, technology and sustainability to drive export growth and higher value addition. 

(KNN Bureau)