India’s export trends

• Exports are a key driver of economic growth and play a significant role in helping countries strengthen their position in Global Value Chains (GVCs), earn foreign exchange, and increase global competitiveness.

• For India exports are crucial for improving economic resilience, reducing trade deficits, and promoting inclusive growth.

• India’s export trends for FY 2023-24 exhibited mixed dynamics, with total exports (goods and services) reaching a record Rs 65 lakh crore and India’s share in the global trade increased to 1.8 per cent from 1.7 per cent in the previous year.

• The improved performance was driven by growth in service exports, particularly in IT/software and business services, which grew by 4.9 per cent.

India’s merchandise exports

• India’s merchandise exports between FY22 and FY24 exhibited a nuanced trend, marked by significant achievements and emerging challenges. 

• Exports rose from Rs 35.3 lakh crore in FY22 to a record Rs 37.7 lakh crore in FY23, reflecting a 6.9 per cent year-on-year growth fuelled by strong performances in sectors such as engineering goods, electronics, and pharmaceuticals. 

• However, in FY24, exports declined to Rs 36.5 lakh crore, a 3.1 per cent contraction, signaling challenges like subdued global demand and sector-specific declines. 

• Several Non-Value Added (NVA) commodities witnessed notable declines in FY24. For instance, raw sugar exports dropped by 51.6 per cent, and coke and semi-coke experienced a steep 76.6 per cent contraction. Exports of natural diamonds and petroleum residues also fell by 26.4 per cent and 15.5 per cent, respectively, reflecting external demand constraints and shifting trade patterns. These declines highlight the vulnerabilities of certain commodity-based exports to global economic and market fluctuations.

• Despite these setbacks, some sectors-maintained resilience. Electronic goods continued their upward trajectory with a 54.8 per cent year-on-year increase, while agricultural products, such as rice and processed food items, showed steady growth. Industries such as biological and drug formulations (5.2 per cent) and telecom instruments (4.8 per cent) demonstrated notable growth.

Defence exports

India’s defence exports have seen remarkable growth, surging to Rs 21,255 crore in FY24, registering 34 per cent growth over FY23. This reflects not just an expansion in export volume but also a shift in perception India is increasingly seen as a dependable defence supplier in regions like Southeast Asia, Africa, and Latin America. This momentum, backed by policy reforms and an emphasis on domestic production under the ‘Make in India’ initiative, is likely to position India as a global defense manufacturing hub in the coming years.

Processed and specialty foods industry

Beyond traditional sectors, India’s processed and specialty foods industry is another area witnessing strong export potential. Rising global demand for plant-based proteins, ready-to-eat meals, and organic products has created new avenues for Indian manufacturers, particularly in markets such as the US, Canada and Europe.

Engineering goods sector

India’s engineering goods sector, constituting over 25 per cent of the country’s total merchandise exports, demonstrated resilience and adaptability during FY24 despite global economic uncertainties. Exports in this category reached Rs 9.1 lakh crore, a modest increase of 2.1 per cent compared to FY23. The United States remained the largest market for Indian engineering exports, accounting for Rs 1.4 lakh crore (15.9 per cent of the total), followed by the UAE and Saudi Arabia. Notably, Indian exporters expanded their reach into emerging markets such as Macao, Georgia, etc, reflecting a strategic effort to diversify export destinations.

Electronic goods

India’s electronic goods exports demonstrated significant growth in FY24, reaching Rs 2.4 lakh crore, compared to Rs 1.9 lakh crore in FY23, marking a robust year-on-year increase of approximately 25 per cent. Key export destinations include the USA, which accounted for 35.4 per cent of total exports, followed by the UAE (11.4 per cent), and European nations such as the Netherlands, UK, and Italy collectively contributing a significant share.

Chemical and allied product

In FY24, India’s chemical and allied product exports showcased a diverse portfolio, with bulk minerals and ores leading the category at Rs 70,712 crore. Organic chemicals followed closely with Rs 50,208 crore in exports, reflecting India’s expertise in specialty chemicals and pharmaceutical intermediates. Agrochemicals contributed Rs 32,886 crore, driven by robust demand for crop protection products. The United States and China emerged as the top destinations, contributing 15.6 per cent and 12.1 per cent, respectively, of the total export value. Other notable markets included the UAE (6.3 per cent), Saudi Arabia (3 per cent), and Brazil (2.9 per cent).

Agricultural exports

In FY24, India’s agricultural exports demonstrated resilience amid global uncertainties, supported by key government initiatives and favorable policy measures. Major export destinations included the USA, China, UAE, and Bangladesh, reflecting India’s strong Agri-trade relationships with these nations. Key commodities driving exports were cereals, rice, spices, and oilseeds, which benefitted from enhanced productivity and market access initiatives.