Free Trade Agreements can help India grow its exports that have been badly hit off late

The Economic Survey 2016 put forth today has outlined India's economic growth as amongst the highest in the world. The economy has grown between 7 to 7.5% and the growth in Index of Industrial Production stands at 3.1%.

India’s Free Trade Agreements have doubled to about 42 since the mid- 2000s. These have increased trade with FTA countries more than before. Today India maintains relatively high tariffs and hence had larger tariff reductions than its FTA partners.

While India’s import bills have come down considerably over last year, all thanks to the tremendous dip in crude prices, it’s exports have been faring rather badly over the last 6 months. This is also a reason why the expectation on the current account deficit has been increased to 3.9%, given the government continues to expect that exports will see a slow growth trajectory.

This is also why the FTAs come back into key focus, given that India will now be able to leverage these trade pacts to push its exportable products more and more.

In case of the ASEAN FTA, the country can boast of statistically significant 33% increase in exports and 79% increase in imports.

The trade increases have been much greater with the ASEAN in comparison to the other FTAs. Metals have gained in the import tab and the FTAs have led to hike in the demand for apparels, especially in ASEAN markets.

Image credit: Indiatimes