FTA’s Don’t For India; Trade Deficit With Partners Widens By 23% In Q2 2024-25

New Delhi, Mar 29 (KNN) India's trade deficit with Free Trade Agreement (FTA) partners has grown by 23 per cent year-on-year to USD 26.7 billion in the second quarter of 2024-25, according to a recent Niti Aayog report. 

This widening gap comes even as India continues to sign new FTAs with countries globally, with a particular focus on developed nations.

The report reveals that exports to FTA countries totaled USD 37.4 billion during the quarter, marking a 4 per cent year-on-year decline. 

Key regions contributing to this overall drop included ASEAN, Singapore, and Australia. However, not all markets showed declines, with exports to Japan, Bhutan, and Sri Lanka experiencing growth, highlighting potential opportunities in these markets.

In contrast, imports from FTA countries increased by 5 per cent year-on-year during the same period, reaching USD 64.3 billion. The United Arab Emirates led this growth with a significant 48 per cent increase, driven by strong demand for key commodities. 

Other countries showing strong import growth included Japan, Thailand, and Mauritius. Conversely, imports from Malaysia, Australia, and Sri Lanka saw sharp declines.

The Niti Aayog report also highlighted India's position in global textile exports, noting that while India ranks 6th globally, its export basket remains heavily weighted toward natural fibers, particularly cotton and carpet threads. This stands in contrast to global trends, which are shifting toward manmade and technical textiles.

According to the report, knitted and non-knitted apparel and clothing accessories represent approximately 60 per cent of global textile export demand, but India holds only a 6 per cent share in this segment. 

This disparity reflects India's continued focus on traditional textiles and natural fibers while struggling to expand its presence in the high-growth synthetic and technical textile segments that increasingly dominate global markets.

(KNN Bureau)