How can MSMEs be helped to use FTA preferences?

India's expanding trade network — capped by the India–New Zealand FTA, which grants duty-free access to 100% of Indian exports from 20 October 2026 and targets labour-intensive lines like textiles, leather, and gems and jewellery [1] — delivers gains only when exporters actually claim them. With MSMEs contributing about 45.73% of India's exports [3] but national FTA utilisation stuck at 20–30%, against 60–70% for partner countries [2], helping small firms convert paper preferences into real duty savings is the decisive reform.

Why MSMEs under-use preferences

• Rules of origin compliance: claiming zero duty requires a certificate of origin, factory-level cost records and later verification; in a small firm this burden falls on one or two people already handling several functions [2].
• Cost asymmetry: on a small consignment, documentation and consultancy costs can exceed the duty saved, so the firm simply pays full duty [2].

Simplify the procedure

• Extend the trust-first proof of origin model — CBIC's self-certified Origin Declaration under the India–UK CETA, where the exporter declares first and customs verifies later [4] — to the New Zealand FTA from day one.
• Make the certificate of origin fully digital and free for micro and small exporters through a single-window portal.

Information and capacity building

• Before entry into force, publish product-wise tables showing existing duty, new duty and the applicable origin rule; an exporter who cannot see the rupee gain will not begin the paperwork.
• Retool Export Promotion Council and DGFT training around one question — which documents secure zero duty for my product — rather than general FTA awareness, using district export hubs for last-mile handholding.

Institutional follow-through

• Publish annual utilisation rates for each FTA, exposing origin rules that are too tight to use.
• Replicate the India–Australia ECTA experience, where utilisation reached 77% within nine months [5] — evidence that uptake is an outcome of design and administration.

India's FTA success must be measured not by agreements signed but by preferences used. Pairing simplified, digital origin procedures with sustained MSME handholding and published utilisation data will turn trade diplomacy into jobs and incomes at the grassroots, advancing the goals of Atmanirbhar Bharat and inclusive, employment-led growth.