India’s free trade agreements (FTAs) are delivering mixed results, with exports to the United Arab Emirates (UAE) rising sharply while shipments to Australia recorded limited growth and exports to Mauritius declined.

Indian merchandise exports to the UAE increased 27.8% to $36.26 billion from a pre-agreement average of $28.38 billion. The India-UAE Comprehensive Economic Partnership Agreement came into effect in May 2022.

Consumer goods exports rose 25.7% to $18.77 billion, while capital goods shipments climbed 77.1% to $7.87 billion. These two categories accounted for more than 90% of the increase in exports to the UAE, making it the strongest performer among the three established FTA partners examined.

India’s exports to Australia increased just 2.3% to $7.74 billion from $7.56 billion. While capital goods exports grew 20.8% to $868.8 million, consumer goods shipments rose only 2.4%. Exports of intermediate goods declined 12.8%.

The figures suggest that the trade agreement, which took effect in December 2022, has supported growth in selected categories but has not yet translated into strong overall export expansion.

Exports to Mauritius fell 24.3% to $631.8 million from $834.5 million. Consumer goods shipments declined 28.6%, while intermediate goods exports dropped 25.8%. Capital goods exports, however, increased 24.4% to $52.3 million.

India’s newer agreements with the UK and the European Free Trade Association (EFTA) have shown signs of increased trade. However, imports have also grown, and exports to individual markets remain uneven.

The data suggests that FTAs alone cannot guarantee export growth. Indian businesses will need to improve competitiveness, expand product offerings and make effective use of preferential market access to gain lasting benefits from these agreements.

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