Our internal analysis of trade with India’s free trade agreement (FTA) partners prior to and after the signing of the FTA indicates an increase in share of India’s imports of raw materials, intermediate goods and capital goods. There has also been a corresponding increase in India’s exports of intermediate and capital goods after implementation of FTAs. This could be attributed to value added domestic production which presumably had a positive effect on employment generation.

The employment generation in the country can be attributable to many other factors and external trade is one of them. Similarly, the valuation of the rupee is contingent on many factors including balance of trade.

This information was given by the Commerce and Industry Minister Smt. Nirmala Sitharaman in a written reply in Rajya Sabha.

Valuation of the rupee tied to trade balance; FTA-driven trade composition shifts are relevant but not determinative. FTA implementation correlated with increased imports of raw materials, intermediate and capital goods and higher exports of intermediate and capital goods, reflecting domestic value addition and a plausible positive effect on employment; valuation of the rupee remains contingent on multiple factors, including the balance of trade, so trade composition changes under FTAs are relevant but not determinative.