Export Surge: India Steps Up on Global Stage

Introduction:

The journey of Indian exports is a result of innovation with global integration. The export sector, diversified from textiles and spices to technology, pharmaceuticals, and engineering goods, is now growing at 7.1% (2024), significantly outpacing global growth (2.5%). Exports’ share in India’s GDP has climbed to 21.2% in 2024. India’s trade performance continued its growth trend in the first five months of FY 2025–26, driven by government reforms, digital transformation, and an entrepreneurial spirit.

Key Takeaways

    • Overall Growth: Exports surged by 5.19% to USD 346.10 billion in April-August 2025 vs. the same period in 2024.
    • Segment Performance: Merchandise export rose by 2.31%, and service export surged by 8.65%.
    • Core Manufacturing Strength: Non-petroleum and non-gems & jewellery exports grew strongly by 7.76% to USD 146.70 billion.
    • Export Target: 34.61% of the USD 1 trillion target for FY 2025-26 has been achieved in the first five months.
    • Top Performer: Electronic goods exports led the growth momentum with a 40.63% rise.

Growth Trajectory

Total export value for April–August 2025 reached USD 346.10 billion. This growth is increasingly driven by the high-value services sector and advanced manufacturing.

Export SegmentValue (Apr–Aug 2025)ShareGrowth Rate (YoY)
Total ExportsUSD 346.10 Billion100%5.19%
Merchandise Exports53.09%2.31%
Service Exports46.91%8.65%
August 2025 GrowthN/AN/A4.77%

Key Drivers Behind Merchandise Export Growth

Merchandise exports, totaling USD 183.74 billion in the first five months, show a strong thrust in technology and high-demand agricultural products.

Top Performing Commodities (April-August 2025)

Commodity/SectorGrowth Rate (YoY)Key Initiative & Impact
Electronic Goods40.63%Production increased 6x and export 8x in 10 years, driven by Make in India and PLI schemes. Smartphone exports crossed ₹1 lakh crore in five months.
Other Cereals21.95%Rise due to global demand for nutritious and health-conscious food (Rye, Barley, Oats, etc.).
Meat, Dairy & Poultry20.29%Supported by the Agriculture Export Policy and APEDA for market development.
Tea18.20%India surpassed Sri Lanka to become the world’s second-largest exporter in 2024.
Drugs & Pharmaceuticals7.30%Sustained demand for affordable generics and quality products, growing to USD 12.76 billion.
Engineering Goods5.86%Supported by schemes like Zero Duty Export Promotion Capital Goods (EPCG) and Market Access Initiative (MAI).

New Engine of Growth

The services sector continues to demonstrate resilience and is a vital contributor to foreign exchange earnings.

    • Trade Surplus: The services sector generated a trade surplus of USD 79.97 Billion in April-August 2025, contributing significantly to lowering the overall trade deficit.
    • Key Growth Factors:
      • Technology Sector: Projected to contribute nearly one-fifth of the economy by 2030, driven by cloud computing, AI, and FinTech.
      • Demographic Dividend: India’s large youth population (65% under 35) provides a competitive advantage and a skilled workforce (e.g., Skill India Program).
      • FDI Liberalisation: Enhancing sectoral caps (e.g., insurance from 74% to 100%) to attract capital.

India’s Strategic Trade Ties & Policy Reforms

India’s trade ties are strengthening, with Hong Kong, China, USA, Germany, and Korea showing significant merchandise export growth (April-August 2025). The government’s initiatives are focusing on logistics, digital tools, and tax reforms.

Initiative/ReformKey Impact & Achievements
Logistics & InfrastructureGlobal logistics rank rose from 44 (2018) to 38 (2023) due to PM GatiShakti and National Logistics Policy. PLI scheme generated ₹16.5 lakh crore in output.
GST ReformsRemoves value-based threshold for GST refund on exports (supporting small exporters). GST cuts on trucks/delivery vans (28% to 18%) and packaging materials (12-18% to 5%) to reduce logistics costs.
Digital SimplificationNational Single Window System simplifies approvals. ICEGATE streamlines e-filing and e-payments at Customs.
Trade PolicyForeign Trade Policy 2023 and RoDTEP scheme (reimbursed nearly ₹58,000 crore) are boosting competitiveness.
Trade AgreementsFocus on key pacts like India-UK CETA and India-EU FTA to expand market access for services and goods.
MSME FocusExport Promotion Mission (a ₹2,250 crore initiative) addresses challenges related to export credit and non-tariff barriers, supporting MSMEs.

New Moves to Take India Global- Next-Generation GST Reforms

    • 90% provisional refund for zero-rated supplies based on system-driven risk checks from November 1, 2025.
    • Removes value-based threshold limit for GST refund on exports. This will support small exporters as they can claim refunds on their small value consignments too.
    • GST cuts on paper packaging, textiles, leather, and wood from 12–18% to 5% resulting in lower production costs, enabling exporters to offer more competitive prices. GST on trucks and delivery vans, reduced from 28% to 18%, and lower GST on packaging materials reducing freight and logistics costs, enhancing competitiveness. Besides, GST on toys and sports goods have been cut from 12% to 5%, incentivising domestic production, countering cheap imports, and tapping rising global demand.
    • The place of supply for “intermediary services” will be determined as per the location of the recipient of such services, to help Indian exporters of such services claim export benefits.
    • Correction of inverted duty structures in textiles and food processing eases working capital pressure, reduces refund dependency and encourages domestic manufacturing.
    • 90% provisional refunds for inverted duty structure (IDS) claims on a risk-based basis.
    • The Export Promotion Mission, announced in the Union Budget 2025-26, is being coordinated by the Department of Commerce along with the Ministry of MSME and Ministry of Finance. Under the mission, ₹2,250 crore initiative has been proposed with the intent to address challenges related to export credit accessibility, factoring for cross-border trade, and overcoming non-tariff barriers, with a particular focus on supporting MSMEs.

New Trade Agreements

Trade agreements are agreements between the country(s) or regional blocks to reduce or eliminate trade barriers, though mutual negotiations with a view to enhancing trade. Some of the new trade agreements which are being discussed or are released are:

    • India-UK Comprehensive Economic and Trade Agreement (CETA)
    • India-EU Free Trade Agreement
    • India-Australia Comprehensive Economic Cooperation Agreement
    • India-New Zealand Free Trade Agreement
    • India and Oman Comprehensive Economic Partnership Agreement (CEPA)
    • India- Peru Free Trade Agreement (FTA)
    • India- Chile Comprehensive Economic Partnership Agreement (CEPA)
    • India- UAE Comprehensive Economic Partnership Agreement (CEPA)

Conclusion:

This acceleration in exports, driven by both traditional sectors and high-growth areas like electronics and services, is poised to further enhance economic development and employment, reinforcing India’s global position.

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