Across the globe, the topic of free trade agreements (FTAs) has remained a subject of ongoing debate. This paper aims to clarify recent misconceptions surrounding India's FTA strategy, particularly within the framework of the Act East Policy. It achieves this objective by examining the factors influencing Intra-Industry Trade (IIT), a dominant form of trade that conventional trade theories struggle to explain. Significantly, the paper explores the economics of IIT especially in the presence of FTAs using innovative trade theories. The theoretical analysis is supported by vast economic literature. The paper, therefore, underscores that an FTA in goods and services among ASEAN+6 countries lead to an increased trade integration under RCEP. This trade pattern has been witnessed particularly with India's active participation in global value chains, which has the potential not only to stimulate Intra-Industry trade flows in the relevant region but also to sustain them.