India’s Export Strategy

India must urgently recalibrate its export strategy to navigate rising global trade headwinds and maintain international competitiveness. This recalibration should focus on market diversification, deeper diplomatic engagement, and stronger on-ground business development in key export destinations.India’s ambition to become a developed nation by 2047 is closely tied to its ability to sustain economic growth above 8% annually. Such growth is necessary to build a $20 trillion economy, generate fiscal resources, and lift millions of people out of poverty.Global development experiences clearly demonstrate the power of export-led growth. Countries such as China, South Korea, and Vietnam transformed their economies by prioritising manufacturing exports, integrating with global value chains, and scaling industrial capacity

Current Status of India’s Exports

India’s exports have shown steady growth despite global trade uncertainties. In August 2025, Indian exports registered a positive growth of 4.77% compared to August 2024. During the period April–August 2025, total exports increased by 5.19%, reaching USD 346.10 billion, reflecting resilience in external trade.

Composition of Export Growth

During April–August 2025, merchandise exports grew by 2.31%, while services exports recorded a stronger growth of 8.65%, underlining the increasing importance of services in India’s export basket. The faster expansion of services exports continues to support overall trade performance.

Market-wise Export Performance

India’s exports witnessed significant growth to key markets such as Hong Kong, China, the United States, Germany, South Korea, the UAE, Nepal, Belgium, Bangladesh, and Brazil during April–August 2025 compared to the same period in 2024. This diversification highlights India’s improving global trade footprint.

Government Assessment and Export Targets

The Union Minister of Commerce and Industry stated that India’s export performance reflects the resilience of the Indian economy and the competitiveness of domestic industries. The government reiterated its commitment to achieving the ambitious target of USD 2 trillion in exports by 2030.

Sector-wise Trends in Export Performance

Merchandise Exports

India’s merchandise exports rose to USD 35.2 billion in April 2024, compared to USD 34.8 billion in April 2023, indicating moderate but steady growth.

Non-Petroleum and Non-Gems & Jewellery Exports

Exports excluding petroleum products and gems and jewellery grew by 1.32%, reaching USD 26.11 billion, suggesting a broad-based recovery across manufacturing sectors.

Services Exports

Services exports were estimated at USD 29.57 billion in April 2024, continuing their positive trajectory and contributing significantly to India’s overall export growth.

Rise of High-Tech and Value-Added Exports

The Production Linked Incentive (PLI) scheme has accelerated advanced manufacturing in India. Electronics exports surged by 32.47%, reaching USD 38.58 billion in FY 2024–25, making electronics the third-largest export category and highlighting India’s progress in high-value manufacturing.

Performance of Marine Exports

Although marine exports remained positive overall, they faced short-term challenges, with a 33% year-on-year decline in August and a 27% decline in September, mainly due to US tariff measures. However, timely market diversification toward destinations such as China, Vietnam, Thailand, Japan, and Belgium helped cushion the impact.

How Export-Led Growth Drives India’s Economic Transformation

Employment Generation and Demographic Dividend

Export-led growth has the potential to generate millions of jobs by expanding labour-intensive sectors such as textiles, pharmaceuticals, electronics, and food processing. These sectors absorb India’s large young workforce and help reduce unemployment and underemployment.
For instance, the rapid growth of smartphone manufacturing under the Production Linked Incentive (PLI) scheme has significantly boosted employment. India’s smartphone exports surged to ₹90,000 crore in FY23, doubling year-on-year, and created nearly 3 lakh direct jobs and 6 lakh indirect jobs, demonstrating the employment multiplier effect of export-oriented manufacturing.

Reducing Trade Deficit and Strengthening Foreign Exchange Reserves

A strong export focus reduces excessive dependence on imports, particularly in strategic sectors such as electronics, energy equipment, and chemicals. Rising exports narrow the trade deficit and enhance foreign exchange reserves, making the economy more resilient to global shocks.
India’s merchandise exports increased by 6% to a record USD 447 billion in FY 2022–23, driven by petroleum products, pharmaceuticals, chemicals, and marine exports. This helped reduce the trade deficit to USD 21.94 billion in December 2024, improving macroeconomic stability.

Integration into Global Value Chains (GVCs)

Export-driven manufacturing enables India to integrate into global value chains, facilitating access to advanced technologies, global best practices, and international markets. This integration enhances productivity, innovation, and competitiveness of domestic industries.
For example, Apple and its suppliers aim to shift 32% of global iPhone manufacturing and 26% of production value to India by 2026–27, positioning India as a critical node in high-value global electronics supply chains.

Promoting Balanced Regional Development

Export-oriented industrial growth encourages the development of manufacturing hubs in Tier-2 and Tier-3 cities, decentralising economic activity and reducing regional disparities.
States such as Tamil Nadu, Karnataka, and Uttar Pradesh have emerged as export hubs, supporting inclusive regional development. In FY23, Tamil Nadu accounted for nearly 30% of India’s electronic goods exports, highlighting the rise of region-based export clusters beyond traditional metropolitan centres.

Boosting Technological Upgradation and Innovation

Export competitiveness compels firms to adopt advanced technologies, upgrade quality standards, and improve efficiency. This leads to economy-wide technological spillovers and productivity gains.
India supplies 20% of the world’s generic medicines by volume, making it the largest global provider, driven by adherence to international quality standards. The Serum Institute of India, the world’s largest vaccine manufacturer, has an annual capacity of 4 billion doses, reflecting India’s strength in technology-driven, export-oriented healthcare manufacturing.

Strengthening India’s Strategic and Geopolitical Position

Rising exports enhance India’s soft power and strengthen economic diplomacy by creating mutual dependencies with trading partners. Export growth has supported deeper engagement with ASEAN, the US, and the Middle East.
India signed major trade agreements such as the India–UAE CEPA and India–Australia ECTA in 2022, boosting bilateral trade, and is currently negotiating trade agreements with the EU and the UK, reinforcing its global economic influence.

Accelerating Green Growth and Sustainability

Export-oriented growth in renewable energy and green technologies positions India as a key player in the global energy transition while aligning economic growth with environmental goals.
India exported 4.8 GW of solar modules in 2023, a 204% increase over 2022. Similarly, exports of wind turbine components nearly doubled in revenue terms compared to 2019, highlighting India’s emerging role in green manufacturing.

Attracting Foreign Direct Investment (FDI)

Strong export sectors attract higher foreign direct investment, as global firms prefer economies integrated into global trade networks. This leads to increased capital inflows, technology transfer, and skill development.
India recorded its highest-ever FDI inflow of USD 83.57 billion in FY 2021–22, with significant investments flowing into export-oriented sectors such as electronics and renewable energy

Emerging Concerns and Headwinds for Indian Exports

Slowdown in Exports to the United States

India’s exports to the United States, its largest export market, have faced a slowdown due to steep tariff hikes imposed by the US. These higher tariffs have reduced the price competitiveness of Indian goods. As a result, India’s exports to the US declined by 8.5% in October 2025, raising concerns about overdependence on a few major markets.

Climate Inaction and Regulatory Risks

India’s export-oriented sectors such as aluminium, iron, and steel are increasingly vulnerable to global climate regulations. According to a Boston Consulting Group (BCG) report, mechanisms like the European Union’s Carbon Border Adjustment Mechanism (CBAM) could impose carbon tariffs on Indian exports. These measures threaten profitability, reduce market access, and penalise carbon-intensive production processes.

Geopolitical Uncertainty and Supply Chain Disruptions

Ongoing global conflicts and shifting trade alignments have disrupted international supply chains. Exporters are facing higher freight costs, volatile shipping routes, and rising insurance premiums, particularly in sensitive corridors such as the Red Sea and the Suez Canal. These disruptions have increased uncertainty in global demand and delivery timelines.

Currency Volatility and Financial Stress

Fluctuations in the Indian rupee, coupled with tighter global financial conditions, have adversely affected export margins. Currency volatility increases hedging costs and financial risk for exporters. To address these challenges, the Reserve Bank of India (RBI) has introduced relief measures such as extended credit periods and relaxed debt repayment norms to ease financial stress on exporters.

Overdependence on Traditional Export Markets

India’s exports remain heavily concentrated in a few markets, particularly the US and the European Union. This limited diversification exposes Indian exporters to policy shifts, demand slowdowns, and regulatory changes in these regions, increasing vulnerability to external shocks.

High Logistics and Transaction Costs

India’s logistics cost stands at approximately 7.97% of GDP, which is higher than the global benchmark of 6–7%. High logistics and transaction costs erode price competitiveness, especially when compared to efficient East Asian exporters. Inefficiencies in transport, warehousing, and port handling continue to affect export performance.

Non-Tariff Barriers (NTBs)

Indian exporters face stringent non-tariff barriers in major markets, including sanitary and phytosanitary (SPS) standards, complex certification requirements, and strict environmental norms. These barriers raise compliance costs and delay market entry, particularly for agricultural and manufacturing exports.

Key Government Initiatives to Boost Exports

Export Promotion Mission (EPM)

The Export Promotion Mission (EPM) was approved by the Union Cabinet in November 2025 with an outlay of ₹25,060 crore for the period FY 2025–26 to FY 2030–31. The mission aims to consolidate fragmented export promotion schemes into a single, outcome-based framework. It focuses on MSMEs, first-time exporters, and labour-intensive sectors, providing digital tools, market intelligence, and capacity-building support.

Credit Guarantee Scheme for Exporters

The Credit Guarantee Scheme for Exporters has been introduced to mitigate financial risks, especially for small and medium exporters. The scheme improves access to affordable credit, enhances confidence among lenders, and strengthens exporters’ capacity to execute international orders.

Trade Facilitation and Export Infrastructure Development

The government has invested significantly in port modernisation, customs digitisation, and the National Logistics Policy to reduce turnaround times and logistics costs. Initiatives such as ICEGATE, reforms in Special Economic Zones (SEZs), and paperless customs processes aim to improve trade facilitation and ease of doing business.

Other Efforts Supporting Export Growth

Districts as Export Hubs

The Districts as Export Hubs initiative promotes local products, traditional crafts, and region-specific industries by connecting them to global markets, thereby encouraging grassroots-level export growth.

 

Trade Agreements and Market Access

India has strengthened trade partnerships through agreements such as the India–UAE Comprehensive Economic Partnership Agreement (CEPA) and the India–Australia Economic Cooperation and Trade Agreement (ECTA). Ongoing negotiations with the European Union and the United Kingdom aim to further diversify export destinations and enhance market access.

Ease of Doing Business and Export Credit Support

Simplified customs procedures, single-window clearances, and digital trade facilitation have improved the export ecosystem. Additionally, expanded financing by EXIM Bank and enhanced risk coverage through the Export Credit Guarantee Corporation (ECGC) are supporting exporters in managing risks and scaling operations.

Key Export Hubs in India

Gujarat

Gujarat is one of India’s leading export hubs, known for its strong presence in textiles, petrochemicals, and gems and jewellery. The state benefits from world-class port infrastructure, with Mundra and Kandla ports serving as major gateways for international trade and significantly contributing to India’s export volumes.

Tamil Nadu

Tamil Nadu plays a crucial role in India’s export ecosystem, particularly in automobiles, electronics, and textiles. The state has emerged as a manufacturing powerhouse, supported by skilled labour and industrial clusters. Chennai Port acts as a key maritime hub facilitating exports to global markets.

Maharashtra

Maharashtra is a major contributor to India’s exports in pharmaceuticals, information technology services, and engineering goods. The state’s strong industrial and financial base is complemented by the Jawaharlal Nehru Port Trust (JNPT), India’s largest container port, which enables high-volume exports.

Karnataka

Karnataka is a prominent export hub for IT services, aerospace, and electronics. Bengaluru, often referred to as India’s Silicon Valley, anchors the state’s IT-driven export growth and also supports emerging high-tech manufacturing sectors.

Andhra Pradesh

Andhra Pradesh has developed strong export capabilities in marine products, agricultural exports, and textiles. Visakhapatnam Port serves as a key export hub, connecting the state’s production centres with global supply chains.

Rajasthan

Rajasthan is well known for its exports of gems, jewellery, and handicrafts, reflecting its rich cultural and artisanal heritage. Cities such as Jaipur, Jodhpur, and Udaipur function as important centres for handicraft and jewellery exports.

West Bengal

West Bengal contributes significantly to exports of jute products, tea, and leather goods. Kolkata serves as the primary export hub, supported by its strategic location and historical role as a trade centre in eastern India.

Odisha

Odisha is a key exporter of minerals, steel, and aluminium, leveraging its abundant natural resources. The Paradip Port plays a vital role in facilitating bulk exports of mineral-based commodities.

Assam and the North-East

Assam and the broader North-Eastern region are emerging export hubs for tea, organic products, and handicrafts. The region’s export strategy is closely linked to enhanced connectivity with ASEAN countries, positioning it as India’s gateway to Southeast Asia.

What Needs to Be Focused to Strengthen India’s Export Strategy?

Strengthening Global Logistics and Trade Infrastructure

India must invest in the development of global logistics corridors, including the establishment of direct shipping routes to Latin America and West Africa, to enhance long-term export competitiveness. While the recently announced shipbuilding package is a positive step, greater budgetary allocation for the RoDTEP scheme is essential to ensure that Indian exports remain price-competitive in global markets.

Enhancing Industrial Competitiveness

Indian exporters need to significantly raise performance benchmarks by focusing on technology adoption, innovation, and sustainability compliance. Building strong branding strategies and local market presence in overseas markets is equally important to move up the global value chain and compete with advanced manufacturing economies.

Accelerating Structural Reforms amid Global Competition

India must accelerate domestic economic and trade reforms to sustain and strengthen its global trade position, especially as competitor countries such as Vietnam, Indonesia, Turkey, and Mexico are intensifying their globalisation and export-led growth strategies.

Expanding Beyond Traditional Export Markets

To reduce excessive dependence on the United States and Europe, India needs to diversify its trade footprint across West Asia, Africa, Latin America, and Southeast Asia. Market diversification will help insulate Indian exports from economic slowdowns and protectionist policies in traditional markets.

Leveraging Trade Agreements for Export Diversification

India’s proactive approach to negotiating new-generation trade agreements provides a strong foundation for export diversification.

• Concluded agreements with the United Kingdom and EFTA

• Near-finalisation of trade agreements with Oman and New Zealand

• Ongoing negotiations with the European Union, Chile, Peru, and the Gulf Cooperation Council (GCC)

Unlike older Free Trade Agreements, these modern partnerships are expected to deliver comprehensive benefits, including enhanced market access, increased investment flows, deeper supply chain integration, and stronger technology collaboration.