India has been signing free trade agreements (FTAs) left, right and centre. But they have been of very little help towards the trade of the country. As per Business Standard, the country has signed several FTAs. But the exports from the country have declined by 1.76% in FY13 as compared to FY12. At the same time, imports have shot up. A big reason for this is that these agreements have actually helped our trade partners more than they have helped us. Most of the countries with whom we have an agreement have used it to send their goods into our shores. Many have even used India as a dumping ground. At the same time exports from our country have actually de-grown. This is due to the poor state of manufacturing in our country.

The sector has just been unable to capitalise on the opportunity presented by these FTAs. And this has led to the skewed trade balance that we see. The only way to fix this would be by fixing the problem at its root. That is fixing the manufacturing sector. This would involve several steps not just from the sector participants but from the government as well. The latter needs to change the policies and remove the bottlenecks in the path of investments. Only then will the manufacturing sector become more competitive. Unless these steps are taken, the FTAs would continue to help our trading partners and put more pressure on the domestic companies.