3 min readNew DelhiApr 21, 2026 04:36 AM IST
Amid India’s aggressive push for global trade integration, the existing free trade agreements (FTA) are not translating to higher exports, as a Niti Aayog report on Monday showed that India’s exports to FTA partners contracted by 7% year-on-year during the October–December quarter of the last financial year. The exports to FTA partners had slipped by 9% during the first quarter of FY26 and 7% during the second quarter.
India’s trade performance with FTA countries assumes significance as New Delhi’s trade has deepened with preferential trading partners. The share of trade with FTA partners has increased significantly from 4.6% in 2006 to 28.8% in 2024, indicating a more than six-fold rise, the Niti Aayog Trade Watch Quarterly report showed.
“India’s exports with its FTA partner countries in Q3 FY26 stood at $40.26 billion, reflecting a decline of 7% y-o-y, indicating some moderation in export performance across key partner countries. In contrast, total imports from FTA partners increased by 6% y-o-y, reaching $70.98 billion during the quarter,” the report said.
The report said the contraction in exports was led by Singapore, where exports declined 34%, followed by Australia, 22.2%, Bhutan, 22.9% and Mauritius, 14%. However, exports to Thailand jumped 8.3%, Sri Lanka 9.9%, the UAE 4.2%, and Malaysia 2.8% during the third quarter of FY26.
Imports from FTA partners increased from $66.75 billion to $70.98 billion, registering a growth of 6% y-o-y, driven by higher inflows from ASEAN 8.6%, Singapore 25.8%, Japan 8.1%, Thailand 20.5%, Malaysia 4.1%, and SAFTA 12.1%. However, imports also declined from Australia by 4.4%, South Korea 2.1%, the UAE 0.4%, Bhutan 40.4%, and Mauritius 87.6%.
India has signed 13 FTAs with various countries and regions, including Japan and South Korea, ASEAN, SAFTA, Mauritius, the United Arab Emirates, and Australia. The timeline of agreements show a steady progression from early partnerships, such as Sri Lanka (2000) and Singapore (2005) to more recent agreements like the UAE and Australia in 2022, demonstrating a strategic push to widen trade engagement, Niti Aayog said.
The report said the developments in West Asia have influenced the pace of progress on the proposed India-GCC FTA, reflecting the link between regional conditions and trade diplomacy.
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“The Gulf region is an important partner for India for energy imports, exports, and remittances, with a significant share of trade routed through this region. The Middle East accounts for a large share of India’s energy imports and overseas workforce linkages. The ongoing engagement on the FTA indicates efforts to expand market access, support trade diversification, and strengthen export growth,” the report said.
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