The trade deficit with FTA partners also increased to $ 30 billion in January-June this year from $ 27.9 billion the same period last year.
Most of the free trade agreements that India has entered into over the years are not delivering the expected benefits. Giving a starker view of this, a recent analysis has showed that exports to the countries with which India has no bilateral trade pacts are holding up better in the current scenario, as compared to the shipments to the FTA partner countries.
In the first six months (January-June) of 2023 merchandise exports to FTA partners declined 18.2% on year while the overall decline in shipments during the period was only 8.1%, according to the analysis by trade policy think tank Global Trade Research Initiative.
The decline in exports to FTA partners brought down their share in overall exports to 26.8% in the Jan-June 2023 from 30.1% in the same period last year. The FTA partners with the biggest decline in exports are South Asia Free Trade Area AFTA (33.2%), South Korea (30%), Australia (25.4%), Japan (15.6%) and ASEAN (13.4%), according to GTRI.
While overall imports from FTA partners have also declined during the six months by 11%.Overall exports to FTA countries were $ 58.6 billion in the first half of 2023, down from $71.6 billion in the year ago periodr. Imports during Jan-June declined to $ 88.6 billion from $ 99.5 billion in the year ago.
The trade deficit with FTA partners also increased to $ 30 billion in January-June this year from $ 27.9 billion the same period last year.More than half of this deficit or $ 16.1 billion is accounted for by Asean alone which explains the insistence of India on review of Asean-India Trade in Goods. Last year the deficit during the same period was $ 19.3 billion.
Only with SAFTA is India running a surplus of $ 10.3 billion on exports of $ 12.7 billion and imports $ 2.4 billion. Last year’s surplus with Safta which includes Afghanistan,Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka was $ 16.7 billion.
Deficit with Australia ($ 4.2 b), Japan ($6.2 b), Korea ($ 6.7b), UAE ($7.2b). Overall India’s merchandise exports in Jan-June were $ 218.7 billion, down 8.1% from last year. Imports during the period were at $ 325 billion, down 8.3% on year. Services imports touched US$ 89.8 billion during January-June 2023, exhibiting a growth of 8.1 % over the same period last year (Jan-June 2022). Services exports reached a turnover of $166.7 billion during January-June 2023, exhibiting a healthy growth of 17.7 % over the same period last year .Services imports touched$ 89.8 billion during in the first half of 2023, exhibiting a growth of 8.1 % over last year.
India’s foreign trade – Exports and Imports of Merchandise and Services – reached$ 800.6 billion during January-June 2023.
Source:financialexpress.com