how can indian companies benefit from FTA in 2025

Indian companies can significantly benefit from Free Trade Agreements (FTAs) by gaining easier access to foreign markets, reducing trade costs through lower tariffs, and fostering greater competition and innovation. This leads to increased exports, enhanced foreign investment, and opportunities for growth and diversification. 

Here's a more detailed look at the benefits:

1. Expanded Market Access:

FTAs reduce or eliminate tariffs and other trade barriers, making it easier for Indian companies to export their goods and services to partner countries. 

This opens up new markets, allowing Indian businesses to tap into a wider customer base and potentially achieve higher sales and profitability. 

2. Reduced Trade Costs:

Lower tariffs on imports mean Indian companies can purchase raw materials and components at lower costs, leading to lower production costs and increased competitiveness.

This allows them to offer their products and services at more competitive prices in both domestic and foreign markets. 

3. Enhanced Foreign Investment:

FTAs can encourage foreign investment in India, as they create a more stable and predictable environment for businesses.

This can lead to increased capital inflows, technology transfer, and job creation, contributing to overall economic growth. 

4. Increased Competition and Innovation:

Exposure to foreign competition can stimulate innovation and efficiency improvements within Indian companies.

They are encouraged to develop higher-quality products and services, adapt to changing market demands, and find ways to reduce costs. 

5. Diversification of Trade Relations:

FTAs can help diversify India's trade relationships, reducing its reliance on specific markets or trading partners.

This provides greater stability and resilience to the Indian economy in the face of potential trade disruptions or economic downturns. 

6. Other Benefits:

FTAs can also lead to increased access to government contracts, improved intellectual property protection, and greater flexibility in how companies can operate in different markets.

They can also promote better cooperation on trade-related issues, such as standards and regulations.

Specific Examples of FTAs:

India-ASEAN FTA:

This FTA has been instrumental in boosting trade between India and the ASEAN region. 

India-Mauritius CECPA:

This agreement is India's first trade agreement with an African nation, expanding trade relations with the African continent. 

India-UAE CEPA:

This agreement has significantly boosted bilateral trade between India and the UAE. 

In addition to these specific agreements, India is also actively negotiating FTAs with other countries, including the European Union, Australia, and the United States. These FTAs have the potential to further expand market access and boost the Indian economy in 2025. 

Why are Ocean Freight Containers or Shipping Containers 20 feet and 40 feet long?

Ever wondered why shipping containers are 20 feet and 40 feet long, exactly? Why not 18, 36, or 50? The solution does not reside in port design or international control — but in one potent innovation that shook the world’s supply chains.

In the 1950s, American trucker Malcolm McLean had a problem: cargo loading was slow, inefficient and costly. Merchandise was being processed piece by piece. His groundbreaking idea? A standard metal box that could be loaded once, moved from truck to train to ship without unloading. And so the intermodal shipping container was born — along with the modern global supply chain.

But why was the original standard set at 20 feet?

It was a conscious, pragmatic choice. McLean wanted a size that would:

• Easily fit on a truck chassis, for easy highway transport

• Have no height, length or weight above accordingly through conventional rail cars

• Integrate into the cranes and forklifts of the 1950s, particularly at ports where infrastructure was light

• Find the right balance between volume and weight — neither so large as to be unwieldy, nor so small as to be inefficient

That 20-foot length was a happy medium for efficiency, safety, and versatility. Eventually the 40-foot container was brought on board to maximize volume per crane lift—it was twice the length of a 20-foot container, so scaling up was simple. Both lengths were officially standardized in 1968 by the International Organization for Standardization (ISO). Ports and infrastructure around the world adapted to this new system rather than defining it.

The result? So resilient that today, more than 90% of international trade is carried in containers—typically either 20 or 40 feet long. These containers are the foundation for just-in-time inventory, cross-border e-commerce, multi-modal logistics and every modern supply chain you can think of.

So the next time you encounter a shipping container, keep in mind — it’s more than just a steel box. This is the DNA of global trade, cast in a daring, pragmatic vision.

How the Red Sea crisis is impacting Supply chains, Consumers and Climate

The Red Sea is one of the world's super critical trade routes, connecting continents through the Suez Canal. The transit accounts for more than 13 per cent of global trade and 40 per cent of Asia-Europe trade. However, this route has been under severe pressure amid Houthi attacks. Major shipping lines are now avoiding the route, forcing ships to reroute to Africa's Cape of Good Hope, which has increased shipping time by 12 to 14 days.

Impact on the shipping liner industry

The Red Sea crisis has had a paradoxical effect on the liner shipping industry. Profits are boosted despite increasing costs due to disruptions. Reduced capacity has led to higher freight rates, helping the company's bottom lines. Maersk, for example, indicated that Red Sea closures could drive higher earnings.

Impact on global oil trade

Oil & Gas shipments have been under pressure all along the Red Sea route. Till last year, around 6.0 million barrels of crude oil and petroleum products transit through the route daily. This number has been reduced by 50%, severely impacting Europe's energy supply. 

The market has seen constant price fluctuations. Insurance costs have also ballooned, rising to as high as 2 per cent, adding millions of dollars in expenses per voyage. Cargo insurance rates have also skyrocketed, making the Suez Canal route financially unviable for many shipping lanes.

Impact on consumers & climate

Global importers have absorbed rising costs so far, but prolonged instability could fuel inflation. European businesses, heavily reliant on Red Sea trade, face delays and higher shipping costs. Rising costs of essentials are already reshaping consumer preferences. Continued Red Sea attacks can deepen this crisis.

Climate costs are also mounting amid rising tensions. Rerouted ships travelling up to 60 per cent farther are burning more fuel. Carbon emissions have also increased by an estimated 40 per cent voyage. 

With no immediate solution in sight, Global shipping continues to navigate uncertainty in the Red Sea.

Leveraging FTWZs to enhance Indian Pharma Supply Chain

India’s pharmaceutical industry is a global leader, but challenges like API dependency, cold chain logistics, and regulatory complexities often disrupt supply chain efficiency. Free Trade Warehousing Zones (FTWZs) are proving to be a game changer in overcoming these challenges.

How FTWZs Boost Pharma Supply Chains:

Duty-Free Storage: Store raw materials and finished goods without paying upfront customs duties and thus optimizing cash flow.

Advanced Cold Storage: Maintain temperature-sensitive products like vaccines and biologics in state-of-the-art facilities.

Simplified Customs: Fast-track clearance and streamlined processes to reduce delays.

Value-Added Services: Enable repackaging, labeling, mitting and quality checks / inspections in a hassle free manner.

Strategic Locations: Proximity to ports and airports ensures quick and cost-effective deliveries.

Facilities like DP WORLD Free Trade Warehousing Zone are revolutionizing pharma logistics by providing cutting-edge technology and infrastructure thereby streamlining supply chains. FTWZs not only reduce costs but also enhance India’s position as a global pharmaceutical leader

Leveraging FTWZs to enhance Indian Pharma Supply Chain

India’s pharmaceutical industry is a global leader, but challenges like API dependency, cold chain logistics, and regulatory complexities often disrupt supply chain efficiency. Free Trade Warehousing Zones (FTWZs) are proving to be a game changer in overcoming these challenges.

How FTWZs Boost Pharma Supply Chains:

Duty-Free Storage: Store raw materials and finished goods without paying upfront customs duties and thus optimizing cash flow.

Advanced Cold Storage: Maintain temperature-sensitive products like vaccines and biologics in state-of-the-art facilities.

Simplified Customs: Fast-track clearance and streamlined processes to reduce delays.

Value-Added Services: Enable repackaging, labeling, mitting and quality checks / inspections in a hassle free manner.

Strategic Locations: Proximity to ports and airports ensures quick and cost-effective deliveries.

Facilities like DP WORLD Free Trade Warehousing Zone are revolutionizing pharma logistics by providing cutting-edge technology and infrastructure thereby streamlining supply chains. FTWZs not only reduce costs but also enhance India’s position as a global pharmaceutical leader.

Benefits of Free Trade Zones for Pharma Supply Chain

Free Trade Zones (FTZs) provide significant advantages to pharmaceutical companies by improving supply chain efficiency, increasing flexibility, and reducing costs in an industry that is both highly competitive and heavily regulated. Here's a detailed look at how FTZs can serve as a valuable tool for pharmaceutical supply chains:

Duty Deferral and Reduction Verta has collaborated with a client who must store inventory produced in the EU within the US until it is needed at various global locations. The team implemented a public FTZ to defer hundreds of thousands of dollars in customs duties on imported materials until they either enter the US or are shipped elsewhere for consumption. This approach has enhanced the company’s cash flow and minimized or eliminated duties on imported materials.

Streamlined Customs Procedures FTZs expedite the customs clearance process, helping to reduce delays and mitigate associated risks. Pharmaceuticals, especially those that are time-sensitive or temperature-controlled, often need to meet stringent deadlines. FTZs streamline the customs process, ensuring faster distribution and timely delivery to end markets.

Quality Control and Compliance Pharmaceutical products entering an FTZ can undergo inspection, conversion, repackaging, or relabeling before reaching the market or moving to the next stage of the supply chain. This not only leads to cost savings but also ensures compliance with global health regulations, offering flexibility to manage product quality and regulatory adherence prior to reaching consumers.

Inventory Management and Lower Holding Costs FTZs allow pharmaceutical companies to store inventory duty-free for extended periods, reducing carrying costs for high-value items, such as active pharmaceutical ingredients (APIs), that may require long-term storage. This flexibility in inventory management helps reduce costs associated with holding valuable pharmaceutical goods.

Enhanced Security and Risk Management FTZs are governed by stringent security measures and detailed record-keeping, which align with the pharmaceutical industry’s regulatory requirements. These heightened security protocols help protect valuable products, intellectual property, and sensitive data—key assets in the pharmaceutical industry.

Supporting R&D and Market Expansion FTZs can simplify the process of importing small batches for clinical trials or testing, without incurring standard import duties. This benefit is particularly advantageous for companies engaged in research and development of new drugs, offering a cost-effective and streamlined way to conduct testing before moving to full-scale commercialization.

In Conclusion, Incorporating FTZs into a pharmaceutical supply chain strategy enables companies to optimize costs, streamline operations, and maintain regulatory compliance. By strategically utilizing FTZs, pharmaceutical companies can strengthen their global competitiveness while navigating the complexities of international regulations more effectively.

 

The Changing Landscape of Ocean Alliances : Winds of Change

In 2025, the global ocean shipping alliance landscape will change with new collaborations and the dissolution of others. 

Changes to existing alliances 

2M Alliance: Maersk and MSC will end their 10-year partnership in January 2025. The 2M Alliance was one of the largest global shipping alliances, covering routes worldwide.

THE Alliance: Hapag-Lloyd will exit THE Alliance.

THE Alliance will have three members in future instead of four, following the departure of Hapag Lloyd, and will be known in future as the Premier Alliance.

GEMIMI  - A New collaboration 

Maersk and Hapag-Lloyd: Maersk and Hapag-Lloyd will form a new operational collaboration known.as GEMINI.

Other changes 

The Ocean Alliance will publish its updated shipping network for 2025.

Impact

The changes to ocean alliances are due to companies shifting toward independent operations. 

More global offering

To measure the effect of this redistribution on ports, we have analysed the services announced so far by the new alliances to find out which ports loose and which gain from February 2025 on. To do this, we have compared the services offered by the 10 shipping companies which make up the three alliances in 2024 with those they plan to provide in 2025. Certainly, MSC is no longer in an alliance, but we have opted to include it in our panorama, given the importance of its presence on the routes we are concerned with. Moreover, MSC and Premier Alliance announced in September that they would be cooperating on Asia-Europe routes.

Overall, the alliances will offer more services from February 2025 on. The different shipping companies have decided to increase the number of joint services they offer, which will increase from 17 to 24 between Asia and Europe and from 9 to 17 - virtually double - between Asia and the Mediterranean. There will be seven additional transpacific services, taking the total to 54. The number of transatlantic services has already increased, even though Premier Alliance members have yet to issue their sailing schedules for this market.