Introduction:

India’s export performance in 2025 marks a period of renewed confidence and strategic growth. Between April and August 2025, India’s total exports—comprising both merchandise and services—rose by 5.19% compared to the same period in 2024, reaching USD 346.10 billion. This growth underscores India’s expanding presence in global trade at a time when the world’s overall export growth remains sluggish at around 2.5%.

• • India’s exports have consistently outpaced global averages, reflecting the combined impact of government reforms, diversification of export destinations, technological advancement, and an increasingly competitive industrial base. The share of exports in India’s GDP has risen from 19.8% in 2015 to 21.2% in 2024, highlighting the growing significance of foreign trade in national economic growth.

Overview of Trade Performance:

In the first five months of FY 2025–26, India achieved 34.6% of its ambitious USD 1 trillion annual export target.

• • Merchandise exports: USD 183.74 billion (↑2.31%)
  • Services exports: USD 162.36 billion (↑8.65%)
  • Trade surplus in services: USD 79.97 billion

While merchandise exports reflect a gradual industrial recovery, the services sector remains the dominant driver of India’s trade surplus.

Top Performing Sectors:

1. Electronic Goods:

• • • Electronic goods have emerged as India’s fastest-growing export category, rising by 40.63% during April–August 2025. Exports increased by USD 5.51 billion over the previous year, reflecting the success of Make in India and Production-Linked Incentive (PLI) schemes.
    • Smartphones have been a game-changer—India has transformed from a net importer to a net exporter, with smartphone exports crossing INR 1 lakh crore in just five months of FY 2025–26, a 55% rise from the previous year. Key markets include the USA, UAE, China, Netherlands, and UK.

2. Other Cereals:

• • • Exports of “other cereals” such as barley, oats, quinoa, and fonio grew by 21.95%, driven by increasing global demand for nutritious and climate-resilient foods. These crops, excluding rice, wheat, and maize, have opened new opportunities for Indian farmers, with major buyers being Nepal, Sri Lanka, UAE, Bangladesh, and Bhutan.

3. Meat, Dairy, and Poultry Products:

• • • This category recorded 20.29% growth, supported by schemes such as the Agriculture Export Policy and APEDA programs that assist in infrastructure and market development. Major destinations include Vietnam, UAE, Egypt, Malaysia, and Saudi Arabia. The rise reflects India’s growing footprint in processed and high-value agri-exports.

4. Tea:

• • • Tea exports grew by 18.20% during April–August 2025, with a further 20.50% jump in August alone. India overtook Sri Lanka in 2024 to become the world’s second-largest tea exporter.
    • Varieties like Assam, Darjeeling, and Nilgiri continue to dominate international markets, with black tea forming 96% of total shipments. Top buyers include UAE, Iraq, USA, Russia, and Iran.

5. Mica, Coal, and Processed Minerals:

• • • Exports of mica, coal, and other minerals rose by 16.6%, supported by global industrial demand. Major destinations include China, USA, UK, Oman, and Bangladesh.

6. Engineering Goods:

• • • Engineering goods, India’s traditional export pillar, registered a 5.86% increase, from USD 46.52 billion to USD 49.24 billion. Exports include industrial machinery, valves, IC engines, boilers, and ATMs, with USA, UAE, Germany, UK, and Saudi Arabia as key markets.
    • Schemes like EPCG (Export Promotion Capital Goods) and the Market Access Initiative (MAI) continue to strengthen this sector by easing technology imports and market entry.

7. Pharmaceuticals:

• • • Pharmaceutical exports increased by 7.3%, reaching USD 12.76 billion. India remains a global supplier of affordable generics and specialty drugs, exporting to USA, UK, Brazil, France, and South Africa.
    • The Uniform Code for Pharmaceutical Marketing Practices (UCPMP) 2024 and National Medical Devices Policy, 2023 have improved quality and credibility in global markets.

8. Textiles and Apparel:

• • • India’s readymade garments exports rose by 5.78% to USD 6.77 billion. As the sixth-largest exporter of textiles and apparel globally, India holds a 4.1% share in global trade. Strong demand from USA, UK, UAE, Germany, and Spain reflects India’s position in global value chains.
    • Efforts under Aatmanirbhar Bharat, promoting sustainable practices and local value addition, are further boosting the sector.

Key Export Destinations:

• • Hong Kong: Exports grew by 26.19%, reflecting its role as a “Gateway to China”.
  • China: Exports rose 19.65%, led by petroleum, engineering goods, and chemicals.
  • USA: Remains India’s largest single export market (USD 6.87 billion in August 2025).
  • Germany: Growth of 11.73%, led by engineering goods and chemicals.
  • South Korea: Exports increased by 9.69%, supported by the India-Korea CEPA.

Services Export:

India’s services exports continue to outperform, rising 8.65% in April–August 2025 and achieving a trade surplus of USD 79.97 billion. This surplus helped narrow the overall trade deficit.

Major growth sectors include:

• • Information Technology and BPM services
  • Financial and consulting services
  • Tourism and professional services

Key Drivers:

• • Technology and Digital Economy: India’s tech sector contributes 7.3% of GDP, with the digital economy expected to form 20% of GDP by 2030.
  • Youth Demographics: With 65% of the population under 35, India benefits from a large skilled workforce, supported by the Skill India Mission.
  • Liberalised FDI Regime: Reforms such as raising the insurance FDI cap to 100% and trade negotiations like India-UK CETA are deepening market access for digital and professional services.

Government Initiatives Strengthening Exports:

• • Foreign Trade Policy (2023): Simplifies authorisations, promotes remission-based incentives, and supports new market access.
  • RoDTEP Scheme: Reimbursed ₹58,000 crore till March 2025 for unrefunded taxes and levies.
  • Districts as Export Hubs: 734 districts identified, with District Export Action Plans (DEAPs) prepared for 590.
  • Special Economic Zones (SEZs): Generated ₹14.56 lakh crore exports in FY 2024–25, up 7.37%.
  • TIES Scheme: Develops export infrastructure like testing labs and warehouses.
  • PLI Scheme: Attracted ₹1.76 lakh crore investments, creating 12 lakh jobs and ₹16.5 lakh crore in output by March 2025.
  • PM GatiShakti & National Logistics Policy: Improved logistics rank to 38 (2023) from 44 in 2018, cutting costs and delivery times.
  • Digital Trade Facilitation: Platforms such as National Single Window System, ICEGATE, and E-Commerce Export Hubs have simplified export operations, especially for MSMEs.

Challenges and Structural Bottlenecks:

1.       Logistics Costs: Still high at 13–14% of GDP compared to 8% in developed economies.

2.      MSME Constraints: Limited access to finance and export market intelligence.

3.      Global Protectionism: Rising tariff and non-tariff barriers, especially in EU markets.

4.     Dependence on a Few Markets: USA, UAE, and EU account for nearly half of total exports.

5.     Skill and Technology Gap: Value-added manufacturing remains limited outside a few sectors.

6.     Volatile Global Conditions: Geopolitical tensions, Red Sea disruptions, and slowing Western economies may moderate export demand.

Way Forward:

• • Diversify export basket toward high-value segments such as semiconductors, green hydrogen, and defence manufacturing.
  • Strengthen MSME linkages through credit access, digital trade facilitation, and skill training.
  • Deepen trade integration via timely completion of FTAs and regional supply chain partnerships.
  • Invest in logistics and ports through PPP models to cut costs and boost reliability.
  • Promote sustainable exports by aligning with global ESG and carbon border norms.

Conclusion:

India’s export surge in 2025–26 reflects both strategic intent and structural progress. A combination of policy reforms, digital infrastructure, sectoral diversification, and strong service-sector leadership has positioned India as an increasingly confident global trading power. However, sustaining this trajectory will depend on addressing logistical inefficiencies, boosting MSME competitiveness, and mitigating external risks. With coordinated policy action and private sector dynamism, India is poised to transform its export-led growth into a cornerstone of its long-term economic resilience.