India's trade deficit with FTA countries widening: Niti Aayog, Pg15

Key Highlights:

• India's trade deficit with FTA partner countries increased by 59.2% between April and June 2025 compared to the previous year.
• Imports rose by 10% to $65.3 billion, while exports declined by 9% to $38.7 billion.
• Electronics exports saw a significant surge of 47%, now comprising over 11% of total exports.
• The widening trade deficit was largely due to a contraction in exports to the ASEAN region.

Detailed Insights:

• India has recently concluded FTAs with Oman, New Zealand, and the UK in 2025 and is actively negotiating with other countries and blocs including the EU, US, Australia, GCC, and EAEU.
• The decline in exports was most pronounced in shipments to ASEAN countries, with significant drops in exports to Malaysia (-39.7%), Singapore (-13.2%), and Australia (-10.9%).
• Imports from UAE increased significantly due to gold compounds and petroleum, while imports from China rose due to circuit boards and electronic integrated circuits.
• India's share of imports from its top seven markets increased to approximately 43% of total imports in Q1 FY26, amounting to $76.7 billion.

Key Concepts Involved:

• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate trade barriers.
• Trade Deficit: The amount by which the cost of a country's imports exceeds the value of its exports.
• ASEAN: A political and economic union of 10 member states in Southeast Asia, promoting intergovernmental cooperation.