India’s Trade Deficit With ASEAN Increases To $35 Bn From $19 Bn: PHDCCI
India’s exports to regions and regional groupings have not increased at the same rate during pre to post-pandemic years
Despite India’s increased export competitiveness and a free trade agreement with ASEAN countries signed in 2010, the trade deficit increased with ASEAN countries from USD 19 billion in pre-pandemic years to USD 35 billion in the post-pandemic period, according to a study conducted by PHDCCI on ‘India’s Trade Patterns with Regions and Regional Groupings: A comparative study of Pre and Post Pandemic years’.
The study revealed that India has a trade deficit with 11 regions and regional groupings in post-pandemic years including, West Africa, Other South African countries, Southern African Customs Union (SACU), Latin America, East Asia (Oceania), European Free Trade Association (EFTA), Other West Asia, ASEAN, Other CIS countries, West Asia- GCC and North East Asia as compared with 13 in pre-pandemic period.
Among them, the trade deficit increased with seven regions and regional groupings. These include East Asia (Oceania), the European Free Trade Association (EFTA), West Asia (GCC), ASEAN, other West Asia, other Commonwealth of Independent States (CIS) countries and North East Asia.
India’s exports to regions and regional groupings have not increased at the same rate during pre to post-pandemic years. Notably, India’s export performance has been significantly resilient in the post-pandemic years as the country’s exports were at all-time high year after year; USD 776 billion in 2022-23 and USD 778 billion in 2023–24. India registered a positive average export growth in 17 out of 19 regions and regional groupings in the post-pandemic period.
India’s exports to European countries including European Union and Other European countries have registered an average export growth of around 20 per cent whereas exports to the European Free Trade Association experienced a relatively modest export growth of around 7 per cent. In America, both the regions; North America and Latin America registered a positive growth rate of 16 per cent each.
The study said, “The growth of India's imports has been comparatively higher than that of its exports across various regions and regional groupings. The net average growth of India's imports from West Africa, North Africa, and the Central African Republic has shown negative trends. In contrast, India's import growth has risen by approximately 20 per cent from regions such as the European Free Trade Association, the South African Customs Union, West Asia, Northeast Asia, ASEAN, and the European Union from the pre-pandemic to post-pandemic period.”
The PHDCCI study also suggested the government to focus on reducing the cost of doing business including- costs of capital, cost of power/ energy, cost of land and availability of land, cost of logistics, cost of labour, increase the ease of doing business to enhance the competitiveness of domestic manufacturing. Explore New Free Trade Agreements (FTAs) for greater integration and bolstering exports. Further, export infrastructure including railways, roadways, and ports should be upgraded and scaled up to reduce the logistic cost in the country.
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