The share of Free Trade Agreement (FTA) partners in India’s trade has risen sharply to 28.8 per cent in 2024, highlighting a structural shift in the country’s trade composition, even as concerns remain over export concentration in sectors such as gold and platinum jewellery, according to NITI Aayog’s latest “Trade Watch Quarterly” report.
“FTA partners have emerged as a key driver of India’s trade integration in value chains,” the report said. It added that “India’s trade composition has undergone a significant transformation, with the share of FTA partners rising from 4.6% in 2006 to 28.8% in 2024,” indicating a clear reorientation of trade flows.
However, the report flagged risks arising from limited diversification in India’s export basket. “Global demand is highly concentrated in gold and platinum jewellery… export concentration risks remain high, [with a] need to diversify,” it said.
The analysis pointed out that while India holds a strong position in select segments, this dominance is not broad-based. “India remains key globally in the gems and jewellery sector, particularly in worked diamonds,” the report noted.
At the same time, structural dependencies persist within the sector. “India has strong import dependence for raw diamonds,” it said, underlining vulnerabilities in the value chain.
The report also highlighted evolving trends within the jewellery segment. “Polished diamonds [share] has been on a decline from 60% in 2020,” while “gold jewellery has been on a steady increase,” it added, reflecting changing global demand patterns.
India’s total merchandise and services trade grew by 5.3 per cent year-on-year to USD 1.37 trillion during April-December FY26, even as the country recorded a combined trade deficit of USD 34.3 billion, the report noted.
Further, product-level analysis showed that India’s export performance has been uneven across categories. “India’s share has declined or remained stagnant across most products, with the exception of raw and semi-processed silver,” the report said.
The findings suggest that while deeper integration with FTA partners is reshaping India’s trade landscape, diversification of exports and movement up the value chain remain critical for sustaining long-term growth.
(ANI)
