An FTA with Australia created an opportunity to access other markets for the country's goods

- After the spread of Corona, a 17 percent decrease in exports was seen for the first time in October

- At a time when the world is moving away from doing business with China, the agreement with Australia will prove positive for India

The Parliament of Australia ratifying the Economic Cooperation and Trade Agreement with India has paved the way for the implementation of the Free Trade Agreement between the two countries. This agreement is likely to be implemented from January 1, 2023. This is India's first such trade agreement with a developed country in more than a decade. This is the second agreement after the United Arab Emirates in May this year. After the agreement with Australia, there are indications from the government that the negotiations with Britain will also be accelerated. The FTA with Australia has created an opportunity for India to gain market share in other countries.

Such agreements are welcome to boost exports from the country, but they can be considered fruitful only when India's exports increase and not just imports. Talking about the export status of the country, after showing good performance in the last financial year, the export performance of India in the current financial year is seen to be weak.

In the financial year 2021-22, India's merchandise exports crossed the $400 billion mark for the first time to $422 billion. A decade before this, i.e. in the financial year 2011-12, India crossed the $200 billion mark for the first time. The export figure of 422 billion dollars in the last financial year under the reduction of Corona was considered as a big achievement and the morale of both the government and the exporters went very high. Considering last year's achievement, exports are expected to cross $500 billion in the current financial year. But the country's merchandise export picture in the first seven months of the current financial year looks pessimistic.

After achieving 25 percent year-on-year growth in exports in the first quarter of 2022-23, there is widespread uncertainty in goods exports. In the second quarter, exports grew by only three percent.

After the spread of Corona, a 17 percent decrease in exports was seen for the first time in October. Thus the strong start to the current financial year seems to have been washed away now. Due to this decrease, the country's goods export growth in the period from April to October 2022 was only nine percent annually. If this rate of export growth continues, it will be difficult to achieve the figure of 500 billion dollars at the end of the year.

Engineering goods, gems and jewelery and petroleum products, the three major sectors that contributed majorly to export growth in the last financial year, are showing weak export performance in the current year and the exports of these products are witnessing a decline. In addition to fears of inflation and a global recession, it is being argued that low demand from China has affected exports. While the government has covered several sectors under the Production Linked Incentive Scheme for the past two years to increase exports from the country, the current decline in exports indicates that the scheme will not be of much benefit in increasing exports.

In the period from April to October, imports have increased by 33 percent against a 9 percent growth in exports. In such a situation, efforts to increase exports from the country have now become imperative. After the free trade agreement with Australia, speeding up trade agreements with Britain and European countries has become necessary for India's export growth. Currently, the agreement with Australia can prove positive for India when the whole world is moving away from trade with China. The waist will have to be tightened.

The FTA with Australia can be considered a major achievement for India but the experiences of India's previous trade agreements with several countries indicate that the use of FTAs ​​is challenging. In particular, there are complaints that problems and disputes arise in the process of obtaining Certificate of Origin and verification process which was done manually earlier, but now it is online. Apart from this lack of adequate information in the contracting industries can also be a major hindrance in boosting exports.

India's position has not been particularly encouraging with a few exceptions in terms of exports of goods. India was counted as a domestic consumer of domestic products. China's GDP per capita is five times that of India and its manufacturing sector is ten times larger than India's. Chinese goods have been very competitive globally in terms of price due to huge production volumes coupled with cheap labour. In addition, China has built up excess capacity for exports.

Like China, India can also become a force in the domestic and export markets for its goods. However, local industries have to be prepared for this. By providing cheap land, cheap capital flow, technology, strong logistic facilities, Government of India should guide and encourage local manufacturers to supply our products domestically and in the world market at competitive rates.