This article is part of a Synergies series on Next generation trade arrangements for environment and sustainable development. Any views and opinions expressed are those of the author(s) and do not necessarily reflect those of TESS or any of its partner organizations or funders.

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The first wave of free trade agreements (FTAs) signed by India in the fifteen years between 1998–2013 are often referred to as India’s FTA 1.0. There was a gap of six years between 2014–2019, whereafter India started signing FTAs with a renewed zeal. This phase is often called India’s FTA 2.0.

Initial FTAs of India focused largely on reduction of tariffs in goods, with a few provisions relating to issues like investment and rules of origin. Rules of origin, for example, were dealt with in the India-Sri Lanka FTA back in 1998, and investment in India-Singapore Comprehensive Economic Cooperation Agreement (CECA) in 2005. Environment and sustainability were not in focus in this phase. However, borrowing from the preamble of the Marrakesh Agreement Establishing the World Trade Organization, some of the earlier Indian FTAs like the India-Singapore CECA and the India-South Korea Comprehensive Economic Partnership Agreement (CEPA) of 2009 had preambular language recognizing that economic and trade liberalization should allow for the optimal use of natural resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment. The India-Japan CEPA signed in 2011 goes beyond the preamble, with a separate Article 8 acknowledging the importance of environmental protection and sustainable development and recognizing the right of the parties to establish their own domestic environmental policies and priorities, while reaffirming their rights and obligations under international environmental agreements to which they are parties. 

However, the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) signed ten years later reverts back to mentioning environment only in the preamble. But the India-Oman CEPA signed in December 2025 in Chapter 12 related to cooperation has a generic mention that cooperation activities shall contribute to sustainable inclusive economic growth and prosperity of the parties, terminology that is not defined in the CEPA. Similar language was seen in Chapter 14 on economic cooperation in the India-UAE CEPA signed in 2022. One may be prone to assume that such agreements mainly between developing countries may not have a pressing need to introduce rules that specifically address apprehension of lowering of environmental standards to attract investment. However, the India-Australia Economic Cooperation and Trade Agreement (ECTA) signed in 2022 mentions sustainable growth only in its preamble. The India-New Zealand FTA agreed in December 2025 also appears to have no reference to sustainable development, as seen in the fact sheet published by the Indian Ministry of Commerce and Industry.

A big change has been seen in 2024 in the India-European Tree Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) that has a separate Chapter on Trade and Sustainable Development, which recognizes the need for adherence of the parties to the principles reflected in multilateral environmental agreements to which they are parties. The chapter covers environment as well as labour standards and gender equality, though couched in best endeavour language and recognition of policy space and choices based on their respective national laws and regulations. However, this chapter is not subject to dispute settlement provisions.

This change in the Indian policy appears to be there to stay, as evidenced by the India-UK Comprehensive Economic and Trade Agreement (CETA) signed in 2025, which has separate chapters on labour, environment, and gender equality. The chapter on environment elaborates certain specific areas for cooperation including ozone depleting substances, air quality, marine environment, forests, biodiversity, and circular economy. Like the FTA with EFTA, the one with the UK also excludes application of dispute settlement provisions to the provisions in these chapters, and the focus appears to be on cooperation between the parties through information exchange and establishment of working groups or sub-committees.

Similarly, the India-EU FTA agreed in January 2026 has a separate Chapter on Trade and Sustainable Development, which has provisions on mutual cooperation on environment, labour, climate, biodiversity, forests, and gender issues as delineated in international agreements to which they are parties. It confirms that each party shall strive to fulfil its obligations, as per national circumstances, under multilateral environmental agreements. In its FTAs with the UK and EU, India has specified that its adherence to labour and environmental standards is limited to federal level laws and regulations. This is understandable as under the Constitution of India, there is a division of powers between the federal and provincial levels, and the provinces have exclusive power to legislate in certain matters, such as land, water, agriculture, and fisheries. 

The bigger message, though, is that while opposing any disciplines on environment in the World Trade Organization (WTO) as it is a non-trade issue, India has found it useful to bring the issue into its FTAs. It will be interesting to examine this anomaly by looking into India’s stand in multilateral environmental agreements and the WTO.

On environment, India has been at the forefront of global discussions, but with a development dimension. The Indian Prime Minister, the only developing country Head of State to attend the 1972 UN Conference on Human Environment in Stockholm, famously posed the seemingly rhetorical question: Are not poverty and need the greatest polluters? At the Earth Summit twenty years later, India led the voice of the Global South to incorporate the principle of common but differentiated responsibilities (CBDR) in Rio Principle 7 and common but differentiated responsibilities and respective capabilities (CDBR-RC) in UNFCCC Article 3, and rooted for technology transfer and financial assistance to help developing countries adopt sustainable practices while reducing poverty and meeting their development needs.

At the same time, India has been taking national level action to pursue its international obligations. For example, India notifies its Nationally Determined Contribution (NDC) to the UNFCCC in consonance with the Paris Agreement of 2015; the 2022 update enhanced its carbon abatement goals for the period 2021–2030. In March 2026, India’s Union Cabinet approved the next NDC to be notified for the period 2030–2035 further enhancing its ambition: to reduce emission intensity of GDP by 4%, achieve 60% cumulative electric power installed capacity from non-fossil fuel-based energy sources, and to create a carbon sink of 3.5–4 billion tonnes of CO2 equivalent. 

On trade, even though India opposed the formal inclusion of environmental issues in the Uruguay Round, in 1994 it negotiated the establishment of the Committee on Trade and Environment in the WTO, and has actively participated in it, starting with the negotiations leading to its first, and only, report (WT/CTE/1) agreed by consensus on the relationship between trade and environment in the WTO. Its last submission (TN/TE/W/79) was, together with China, emphasizing the development dimension of the trade-environment interface, including technology transfer and finance. As part of the working group on trade and transfer of technology, India most recently contributed a draft ministerial declaration (WT/MIN(26)/W/2) on enabling the transfer of relevant and advanced technology for trade during the Fourteenth WTO Ministerial Conference held in Cameroon. 

Similar policy informs the sustainability chapters in the recent Indian FTAs. The relevant India-EFTA TEPA, India-UK CETA, and India-EU FTA chapters, while committing the parties to adhere to their obligations under multilateral environmental agreements, clarifies their right to establish their own levels of environmental protection and priorities. This demonstrates its adherence to an important aspect of international relations: domestic and international policy coherence.

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Atul Kaushik is a former Indian trade negotiator, currently associated with Research and Information System for Developing Countries (RIS)..

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