India's Trade Deficit Shrinks: How PLI Schemes and FTAs Are Shaping the Future

The Economic Survey highlighted how India's trade deficit is narrowing due to PLI schemes boosting domestic manufacturing and increasing exports through Free Trade Agreements. Despite geopolitical risks and commodity price fluctuations, India's initiatives in manufacturing and strategic trade policies are steering economic resilience and future growth.

The Economic Survey revealed that India's trade deficit is narrowing, driven by domestic manufacturing boosts from Production Linked Incentive (PLI) schemes and increased export opportunities through Free Trade Agreements (FTAs). This positive trend is expected to continue, aiding in reducing the trade deficit further.

However, the Survey warned that commodity price fluctuations, particularly for critical imports like oil and metals, could impact trade balance and inflation levels. Ongoing geopolitical tensions also pose risks to export performance and market access.

It emphasized the importance of strategic trade policies and manufacturing competitiveness to sustain economic growth. PLI schemes in various sectors and recent FTAs with countries like Mauritius, Australia, and the UAE are central to enhancing India's global market share and export resilience.