New Delhi: NITI Aayog has urged the government and exporters to extract greater value from India’s existing free trade agreements (FTAs) after official data showed a sharp rise in the trade deficit.
Figures from the Ministry of Commerce and Industry show India’s merchandise trade deficit widened to $115.6 billion in FY 2023-24, up nearly 59% year-on-year, driven mainly by higher imports of crude oil, gold and electronics amid slower export growth.
In a recent paper, NITI Aayog argued that improving the competitiveness of current FTAs should take priority over signing new ones. It recommended targeted incentives for high-potential sectors, deeper integration into regional supply chains through better logistics and customs processes, and greater regulatory alignment with partner countries. The think-tank also proposed setting up an FTA Competitiveness Cell within the Commerce Ministry to monitor performance and resolve bottlenecks.
Commerce Minister Piyush Goyal said the recommendations are under review, underlining the strategic importance of FTAs for export diversification. Industry bodies, including the Confederation of Indian Industry, welcomed the focus, noting that many exporters under-utilise existing concessions due to lack of awareness.
Analysts caution, however, that gains from FTAs must be backed by improvements in domestic infrastructure, skills and technology to sustainably narrow the trade gap.
