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India's export performance in Fiscal Year 2025 (FY25) has demonstrated remarkable resilience and growth, reaching an all-time high of $824.9 billion. This achievement, underscored by the Commerce and Industry Ministry's recent announcement, reflects a 6% year-on-year increase, positioning India as a significant player in the global trade landscape. The driving force behind this surge is primarily attributed to the robust performance of the services sector, which has witnessed unprecedented growth, contributing significantly to the overall export figures. Specifically, services exports soared to a historic high of $387.5 billion in FY25, marking a substantial 13.6% increase from the $341.1 billion recorded in FY24. This phenomenal growth in services exports underscores India's growing competitiveness in sectors such as information technology, business process outsourcing, engineering services, and travel and tourism. The country's ability to leverage its skilled workforce and technological advancements has enabled it to capture a larger share of the global services market, thereby bolstering its export earnings and contributing to its overall economic growth. Furthermore, the growth in services exports highlights the increasing sophistication and diversification of the Indian economy, moving beyond its traditional reliance on merchandise exports. The services sector now plays a pivotal role in driving economic growth, creating employment opportunities, and enhancing India's global competitiveness. The robust performance of services exports has not only compensated for the challenges faced by the merchandise sector but has also provided a stable and sustainable source of export revenue. The Ministry of Commerce and Industry emphasized the significance of March 2025, where services exports stood at $35.6 billion, reflecting an impressive year-on-year growth of 18.6% compared to the $30 billion recorded in March 2024. This consistent growth momentum underscores the underlying strength and potential of India's services sector, indicating a promising outlook for future export performance. The government's proactive policies and initiatives aimed at promoting the services sector, such as streamlining regulations, providing incentives for export promotion, and investing in skill development, have played a crucial role in fostering this growth. Moreover, the increasing adoption of digital technologies and the rise of e-commerce platforms have further facilitated the expansion of services exports, enabling Indian companies to reach global markets more efficiently and effectively. The continued growth in services exports is expected to have a positive impact on India's balance of payments, reduce its trade deficit, and contribute to the overall stability of the economy.
In addition to the remarkable performance of the services sector, merchandise exports, excluding petroleum products, also contributed significantly to India's overall export growth in FY25. These exports reached a record US$374.1 billion, registering a commendable 6% increase from the $352.9 billion recorded in FY24. This achievement is particularly noteworthy considering the challenging global economic environment, characterized by trade tensions, geopolitical uncertainties, and fluctuating commodity prices. The growth in non-petroleum merchandise exports demonstrates India's ability to diversify its export basket and enhance its competitiveness in key sectors such as engineering goods, textiles, chemicals, pharmaceuticals, and agricultural products. The government's efforts to promote manufacturing, improve infrastructure, and reduce transaction costs have played a crucial role in boosting merchandise exports. Initiatives such as the Make in India campaign, the Production-Linked Incentive (PLI) scheme, and the National Logistics Policy have aimed to create a conducive ecosystem for domestic manufacturing and enhance the competitiveness of Indian exporters. Moreover, the government has actively engaged in trade negotiations with various countries and regions to secure preferential access for Indian products in global markets. These efforts have resulted in increased market access and reduced trade barriers, enabling Indian exporters to expand their reach and increase their export volumes. The growth in merchandise exports has also been supported by the increasing integration of Indian companies into global value chains. As Indian manufacturers enhance their capabilities and adopt advanced technologies, they are becoming more competitive in global markets and are able to participate in the production and supply of high-value-added goods. This integration into global value chains has not only boosted merchandise exports but has also contributed to the overall technological upgradation and modernization of the Indian manufacturing sector. Data released last month indicated that India's goods exports grew by 0.7% year-on-year to $41.97 billion in March, taking the overall FY25 merchandise exports to $437.42 billion, which is 0.08% higher than FY24. This marginal increase in merchandise exports reflects the challenges faced by the sector due to the global economic slowdown and trade disruptions. However, the fact that merchandise exports have remained resilient despite these challenges underscores the underlying strength and potential of the Indian manufacturing sector.
Despite the overall positive export performance, India's goods trade deficit in FY25 rose to $282.82 billion, as against $241.14 billion in FY24. This increase in the trade deficit highlights the need for India to further enhance its export competitiveness and reduce its reliance on imports. The government has recognized the importance of addressing the trade deficit and has implemented various measures to promote exports and reduce imports. These measures include streamlining export procedures, providing incentives for export promotion, and encouraging domestic manufacturing. The government is also focusing on attracting foreign investment into key sectors such as manufacturing, infrastructure, and technology, which can help to boost exports and reduce imports. Furthermore, the government is promoting the use of renewable energy sources and energy efficiency measures to reduce India's dependence on imported fossil fuels. This will not only help to reduce the trade deficit but will also contribute to environmental sustainability. Commerce Secretary Sunil Barthwal acknowledged the challenges faced during the last financial year, attributing them to the global economic headwinds and geopolitical uncertainties. However, he emphasized that despite these challenges, India's merchandise shipments and overall exports touched the highest ever figures in 2024-25, reflecting the resilience and determination of Indian exporters. The government remains committed to supporting the export sector and creating a conducive environment for sustained export growth. It is actively engaging with stakeholders to identify and address the challenges faced by exporters, and is implementing policies and initiatives to enhance their competitiveness. The government is also focusing on promoting diversification of export markets and products, reducing transaction costs, and improving infrastructure. By continuing to implement these measures, India can further strengthen its export performance and reduce its trade deficit, thereby contributing to its overall economic growth and prosperity. In conclusion, India's export performance in FY25 has been remarkable, driven by the robust growth in services exports and the resilience of merchandise exports. The country's ability to navigate the challenging global economic environment and achieve record export levels underscores its growing competitiveness and potential as a major player in the global trade landscape. While the trade deficit remains a concern, the government is committed to addressing this issue and is implementing measures to promote exports and reduce imports. With continued focus on enhancing export competitiveness, diversifying export markets and products, and improving infrastructure, India can further strengthen its export performance and achieve sustainable economic growth.
To further expand on the reasons behind India's impressive export figures, it's crucial to acknowledge the structural reforms and policy interventions undertaken by the government over the past few years. The implementation of the Goods and Services Tax (GST) has simplified the tax regime and reduced transaction costs for exporters, making Indian goods more competitive in global markets. The GST has also streamlined the supply chain and improved the efficiency of logistics operations, enabling exporters to deliver their products to international markets more quickly and reliably. Furthermore, the government has invested heavily in infrastructure development, including ports, roads, and railways, to improve connectivity and reduce transportation costs. The development of dedicated freight corridors and the modernization of port infrastructure have significantly reduced the time and cost of exporting goods, making Indian exporters more competitive. The government has also focused on promoting digital technologies and e-commerce platforms to facilitate exports. The implementation of the e-way bill system has streamlined the movement of goods across state borders, while the promotion of e-commerce platforms has enabled small and medium-sized enterprises (SMEs) to access global markets more easily. The government has also launched various export promotion schemes and initiatives to provide financial assistance and incentives to exporters. These schemes include the Merchandise Exports from India Scheme (MEIS), the Service Exports from India Scheme (SEIS), and the Export Promotion Capital Goods (EPCG) scheme. These schemes provide exporters with duty credits, tax benefits, and other incentives to encourage them to increase their exports. The government has also actively engaged in trade negotiations with various countries and regions to secure preferential access for Indian products in global markets. These negotiations have resulted in the signing of free trade agreements (FTAs) and comprehensive economic partnership agreements (CEPAs) with key trading partners, providing Indian exporters with access to new markets and reduced trade barriers. In addition to these policy interventions, the growth in exports has also been supported by the increasing global demand for Indian products and services. The rising disposable incomes and expanding middle class in developing countries have created new opportunities for Indian exporters. The increasing demand for information technology services, engineering services, and healthcare services has also contributed to the growth in India's services exports. The COVID-19 pandemic has also had a significant impact on global trade patterns, with many countries seeking to diversify their supply chains and reduce their reliance on single sources of supply. This has created new opportunities for Indian exporters to fill the gap and increase their market share in global markets. The pandemic has also accelerated the adoption of digital technologies and e-commerce platforms, enabling Indian exporters to reach global markets more effectively.
Source: India’s total exports grow 6.01% to reach record $824.9 bln in FY25