The hidden dividend of FTAs: How talent and startups are becoming India's fastest-growing exports

Free Trade Agreements (FTAs) have traditionally been seen as tools to reduce tariffs, expand market access, and boost trade volumes. But in today’s knowledge-driven global economy, they are unlocking something bigger: enabling talent mobility, supporting innovation-led entrepreneurship, and creating high-skill jobs. FTAs are no longer limited to cargo holds and customs duties; they are reshaping how people, skills, and ideas move across borders.

From trade enabler to talent mobility

Modern FTAs now embed provisions that support the cross-border movement of professionals. They also ease regulatory friction and enable service-led exports. For India, this is unlocking a major advantage: its deep pool of skilled professionals.

The India-UK Free Trade Agreement is a landmark example. Beyond commercial liberalisation, it includes talent-friendly clauses such as the Double Contributions Convention (DCC), which removes dual social security obligations for Indian professionals temporarily posted in the UK. This benefits over 75,000 professionals by improving take-home pay, reducing compliance costs for employers, and encouraging cross-border project deployment.

This model has precedents. The India-Japan CEPA (2011) enabled Indian nurses and care workers to enter Japan’s healthcare market, while the India–Singapore CECA significantly boosted Indian IT and financial services talent, with representation in Singapore’s professional workforce doubling between 2005 and 2020.

Beyond trade: A boost for GCCs and services
 

FTAs are also enhancing India’s position as a delivery hub for global firms. India now hosts over 1,700 Global Capability Centres (GCCs), employing 1.7 million professionals and managing international operations for various industries, including fintech, pharma, technology, automotive, and aerospace. 

The India-UK FTA is expected to accelerate UK investment in this space by providing predictable compliance and stronger dispute-resolution mechanisms. Strategic sectors such as IT, renewable energy, retail, and advanced manufacturing are also expected to benefit.

A Global runway for startups

Perhaps the most overlooked beneficiaries of FTAs are India’s startups and service-led entrepreneurs. Provisions in the India-UK FTA allow digital-first companies in SaaS, healthtech, architecture, and consulting to deliver services cross-border without a physical presence. This reduces barriers and provides Indian founders greater access to mature markets.

Other agreements, such as the ASEAN-India FTA and EU partnerships, are embedding startup-friendly provisions as well. Indian SMEs and entrepreneurs are already making inroads into markets like Malaysia and Indonesia, benefitting from lower entry thresholds and smoother regulatory access.

By easing professional mobility and reducing trade barriers, FTAs allow Indian startups and SMEs to export more competitively, attract foreign investment, and innovate faster to meet international standards. Access to mature markets with simpler tax and regulatory structures lowers friction, helping Indian startups scale globally with confidence.

The hidden dividend

The real value of FTAs lies in their ability to treat talent and trade as two sides of the same coin. Indian professionals bring globally competitive skills, while Indian companies provide agile, scalable solutions. Countries benefit from filling critical talent gaps in technology, R&D, and healthcare, while India gains new opportunities for its talent and startups on the global stage.

In a world where skills travel faster than shipments, India’s FTAs are evolving into more than just trade agreements. They are becoming frameworks that project India as a hub for talent, entrepreneurship, and innovation worldwide.

(Neelabh Shukla, Chief Business Officer, Careernet)