India’s Exports to FTA Partners Decline for Third Consecutive Quarter

Export Trends to FTA Partners

India’s trade dynamics with free trade agreement (FTA) nations have become increasingly important as the country seeks deeper integration in global trade. A report from NITI Aayog has revealed that India’s exports to FTA partners saw a decline of 7% year-on-year during the October to December quarter of the previous financial year. This decline follows earlier contractions of 9% in the first quarter and 7% in the second quarter of FY26.

According to the NITI Aayog Trade Watch Quarterly report, exports from India to its FTA partner countries in the third quarter of FY26 totaled $40.26 billion. The declining export figures highlight challenges in maintaining robust trade performance with key trading partners, while, conversely, total imports from these FTA nations rose by 6%, amounting to $70.98 billion during the same period.

Key Contributors to Declining Exports

The report identified several countries responsible for the reduction in India’s exports. Notably, exports to Singapore plummeted by 34%, while figures for Australia, Bhutan, and Mauritius decreased by 22.2%, 22.9%, and 14%, respectively. On the other hand, India experienced positive export growth to some nations, such as Thailand (up by 8.3%), Sri Lanka (up by 9.9%), the UAE (up by 4.2%), and Malaysia (up by 2.8%) during the third quarter of FY26.

Import Growth from FTA Partners

In contrast to the export trends, imports from FTA partners increased significantly, moving from $66.75 billion to $70.98 billion, which represents a growth of 6% year-on-year. This growth was primarily attributed to higher inflows from multiple countries, including ASEAN countries (8.6%), Singapore (25.8%), Japan (8.1%), Thailand (20.5%), Malaysia (4.1%), and SAFTA (12.1%). However, certain nations saw a decline in imports, including Australia (down by 4.4%), South Korea (down by 2.1%), the UAE (down by 0.4%), Bhutan (down by 40.4%), and Mauritius (down by 87.6%).

Overview of India’s FTAs

India currently has signed a total of 13 FTAs with various countries and regions, including Japan, South Korea, ASEAN, SAFTA, and recent agreements with the UAE and Australia in 2022. The timeline reflects a progressive evolution of trade partnerships, starting with earlier agreements such as with Sri Lanka in 2000 and Singapore in 2005. NITI Aayog has highlighted this strategic initiative to enhance trade engagement on a global scale.

Impact of Regional Developments

The report also noted that developments in West Asia and the ongoing negotiations regarding the proposed India-GCC FTA underscore the interconnectedness of regional conditions and India’s trade diplomacy. The Gulf region plays a critical role as a key partner for India, especially concerning energy imports, exports, and remittances. A substantial proportion of India’s energy imports and overseas workforce originates from this region. The continuation of the FTA discussions aims to bolster market access, diversify trade relationships, and foster export growth.