As per a study published by think-tank Third World Network, India’s three free trade agreements with the ASEAN, Japan and South Korea have resulted in growing deficits in merchandise trade. The government is at present focused on how to make India’s free trade agreements deliver more for all stakeholders and has also employed three think-tanks to analyse the on-going RCEP negotiations.

After the initial spurt in middle of the previous decade, trade imbalances increased sizably after the three Comprehensive Economic Partnership Agreements (CEPA) with the ASEAN, Japan and Korea came into effect. Trade deficit with the three countries, which stood at $4.5 billion in 2004 and $16.4 billion in 2010, shot up to $29.7 billion in 2015 before cooling down a bit to $26.6 billion in 2016.The three CEPAs not only resulted in rising imports but also a progressive slowdown of exports.

Available trends in both exports and imports point to a hollowing out of the manufacturing base, which has prompted the present government to initiate measures for the revival of the manufacturing sector.