What’s been the impact of the country’s trade agreements thus far? The avowed aim is to deepen economic ties, help exporters and smoothen the way for qualified Indians to work overseas. An ET analysis of the seven free trade and economic cooperation agreements that the country has signed shows the work in progress.
India has registered a surplus with two of its free trade agreement (FTA) partners — Mauritius and the South Asian Free Trade Area (SAFTA) — in the last five years while registering a deficit with others, including Asean, South Korea, Japan and the UAE. The trade gap with Australia has been narrowing for the last two years. Despite the trade deficit, India has exported new products such as pomegranate arils after the India-Australia Economic Cooperation and Trade Agreement (ECTA), which came into force on December 29, 2022.
Export diversification
“FTAs have led to deeper engagement with the partner countries with greater market access — trade has increased with them,” said an official. “One such example is pomegranate aril exports to Australia which got a boost after the trade pact.”
India’s exports of furniture and sports goods to Australia, fresh pineapple, apple berry and squash to the UAE and anthurium flowers to Singapore show New Delhi’s expanding ties with its trade partners, even though the value of such products is relatively low.
As per official data, the trade deficit with the UAE widened to $26.8 billion in FY25 from $16.8 billion in FY22, while it narrowed with Australia to $6.9 billion from $8.5 billion over the same period. In contrast, India has maintained a trade surplus with Mauritius, although it declined slightly to $0.5 billion in FY25 from $0.6 billion in FY22.Similarly, the India-Sri Lanka Free Trade Agreement (ISFTA) was signed in 1998 and came into force in March 2000, has seen broad-based expansion of exports, driven by a combination of large-value industrial shipments and essential and consumer goods.
Vehicles and ships powered the 17% rise in India’s exports to Sri Lanka in April–November 2025. “Apart from these large contributors, several other commodities recorded very high growth rates on a relatively lower base, underscoring diversification in India’s export basket to Sri Lanka,” said another official. The combination of strong absolute gains in high-value products and rapid growth in niche and industrial items points to a more diversified and resilient export relationship.
These include cereals, animal products, marine products, lead, ceramics, lac, gums, resins and other vegetable saps and extracts. They recorded high export growth rates on a lower base.
The goods trade deficit with the Association of Southeast Asian Nations (Asean) ballooned to $45.2 billion in FY25 from $25.8 billion in FY22 and $21.8 billion in FY19. Deficits with Japan and South Korea also widened to $12.7 billion and $15.2 billion, respectively, in FY25.
“A review of the trade pacts with Asean and South Korea are going on,” said the official. The Asean-India Trade in Goods Agreement (AITIGA) came into effect in 2010. India’s goods exports to the bloc shrank 5.4% on-year in FY25 to $38.96 billion while imports rose 5.6% to $84.16 billion.
Meanwhile, India continues to maintain a trade surplus with South Asia. However, this surplus declined to $20.2 billion in FY25 from $28.7 billion in FY22 and $21 billion in FY19.