India’s free trade agreements (FTAs) have contributed to a steady rise in exports, but trade deficits with key partners such as the United Arab Emirates and Australia continue to pose a challenge, according to recent trade data and industry assessments.
Since the implementation of agreements like the Comprehensive Economic Partnership Agreement (CEPA) with the UAE and the Economic Cooperation and Trade Agreement (ECTA) with Australia, Indian exports across sectors—including gems and jewellery, engineering goods, textiles, and pharmaceuticals—have witnessed notable growth.
However, imports from both countries have also increased at a faster pace, resulting in a widening trade gap. In the case of the UAE, higher inflows of crude oil, gold, and petrochemicals have contributed significantly to the deficit. Similarly, imports of coal, minerals, and agricultural commodities from Australia have outpaced India’s export gains.
Trade experts note that while FTAs have improved market access and reduced tariff barriers, structural factors such as commodity dependence and price volatility continue to influence the overall trade balance.
Industry stakeholders have called for enhanced export competitiveness, diversification of product baskets, and greater value addition to fully leverage the benefits of these agreements. Strengthening domestic manufacturing and addressing logistics inefficiencies are also seen as critical to narrowing trade imbalances.
While FTAs remain a key pillar of India’s trade strategy, analysts suggest that sustained policy support and sector-specific interventions will be essential to ensure that export growth translates into more balanced trade outcomes.
