0.1 Overall finding of the Niti Aayog report
0.1.1 Niti Aayog’s Trade Watch Quarterly report states that India’s trade deficit with FTA partner countries is rising sharply.
0.1.2 The deficit with FTA partners increased by 59.2 per cent between April and June 2025 compared to the previous year.

0.2 What caused the widening trade deficit
0.2.1 The widening deficit was driven by a 10 per cent jump in imports to $65.3 billion.
0.2.2 At the same time, exports declined by 9 per cent to $38.7 billion, worsening the trade balance.

0.3 Contrasting export trends: decline and surge
0.3.1 India’s exports showed structural divergence during the period.
0.3.2 Petroleum exports declined sharply, while electronics exports surged strongly.
0.3.3 Electronics exports rose 47 per cent year-on-year, increasing their share to over 11 per cent of total exports, reflecting deeper integration into global electronics supply chains.

0.4 Role of ASEAN in widening the deficit
0.4.1 The widening trade deficit was mainly driven by contracting exports to ASEAN countries.
0.4.2 Exports to ASEAN, India’s largest FTA export partner, fell by 16.9 per cent.
0.4.3 Major declines were recorded with Malaysia (-39.7 per cent), Singapore (-13.2 per cent) and Australia (-10.9 per cent).

0.5 Import trends from key FTA partners
0.5.1 India’s share of imports from seven FTA markets rose to 43 per cent of total imports in Q1 FY26, up from 39 per cent in Q1 FY25.
0.5.2 Total imports from these markets amounted to $76.7 billion.
0.5.3 Imports rose sharply from the UAE (28.7 per cent), China (16.3 per cent), USA (16.9 per cent) and Singapore (14 per cent).

0.6 Country-wise variations in import growth
0.6.1 Import growth declined from Iraq (-13.3 per cent), Russia (-8.7 per cent) and Saudi Arabia (-8.5 per cent).
0.6.2 Imports from Russia declined due to lower petroleum oil inflows, while imports of petroleum oils and bituminous minerals increased from other sources.

0.7 Gold and petroleum driving import shifts
0.7.1 The report highlighted a surge in gold compounds and petroleum imports, particularly from the UAE.
0.7.2 Gold imports, which were earlier sourced elsewhere, have made the UAE one of India’s top import sources, surpassing Japan, which was previously the leading supplier.

0.8 Policy context and ongoing negotiations
0.8.1 India has concluded FTAs with Oman, New Zealand and the UK in 2025.
0.8.2 It is in active negotiations with the EU, US, Australia, Bahrain, GCC, EAEU, Canada and SACU, and is considering Preferential Trade Agreements with Brazil and Israel.
0.8.3 Despite export growth in electronics, the report flags concerns about rising import dependence from FTA partners.