The latest insights into India’s import-export trends, key industry shifts, recent policy changes, and how global dynamics shape India’s trade landscape.

Table of Contents

India’s overall trade, encompassing goods and services, is projected to surpass USD 814 billion in 2024, a 5.6% increase from the previous year.

While merchandise exports from April 2024 to January 2025 showed modest growth at USD 358.9 billion, imports surged to USD 601.9 billion, significantly widening the merchandise trade deficit to USD 243 billion.

Services exports, particularly IT and business services, showed robust growth, rising by approximately 14.5% during the same period, thus helping offset the widening deficit.

Electronics, machinery, and pharmaceuticals emerged as leading export sectors, reflecting India’s shift towards higher-value exports.

Traditional sectors such as textiles and gems faced slower demand globally.

Key Sectors Driving Trade

India’s exports continue to be dominated by engineering goods, refined petroleum products, pharmaceuticals, and electronic goods.

Engineering exports alone accounted for about 25% of total goods exports, valued at approximately $56.2 billion from April to September 2024.

The electronics sector, in particular, saw remarkable growth, with exports surging by 79% in January 2025.

Conversely, imports remained heavily skewed towards energy products, electronic components, gold, precious stones, and heavy machinery.

Petroleum imports alone accounted for $154.8 billion in the first ten months of FY2024-25, emphasizing India’s reliance on energy imports.

Policy Changes and Strategic Measures

The Indian government’s Foreign Trade Policy 2023 aims for sustained export growth, setting an ambitious target of $2 trillion in exports by 2030.

Initiatives such as Production Linked Incentive (PLI) schemes, RoDTEP, and RoSCTL foster competitiveness in electronics, textiles, pharmaceuticals, and chemicals.

Recent policy adjustments, such as the deferred licensing norms for laptop and computer imports, indicate the government’s cautious balancing act between protectionism and liberalization.

Export bans on essential commodities like wheat, sugar, and rice have been strategic measures to stabilize domestic prices amid global uncertainties.

These bans impact international markets but ensure domestic price stability.

Impact of Global Dynamics

Global headwinds, particularly the slowdown in major economies like the US and EU, have significantly impacted India’s trade, affecting demand for discretionary items such as gems, textiles, and garments.

Geopolitical tensions, including the Ukraine-Russia conflict and instability in the Middle East, have increased import costs, particularly for crude oil and fertilizers.

However, the “China+1” strategy presented opportunities for India to attract manufacturers seeking diversification from China, boosting sectors like electronics and engineering goods.

Nevertheless, India’s dependency on Chinese imports remains high, with bilateral trade projected to cross $100 billion in FY2024-25.

Trade Agreements and Disputes

India continues to pursue Free Trade Agreements (FTAs) aggressively.

Recent successes include comprehensive economic partnerships with the UAE and Australia, which led to significant trade expansions with these countries.

Negotiations are ongoing for strategic FTAs with the United Kingdom and GCC countries, aiming to diversify export destinations further.

Trade disputes remain challenging, notably with the European Union regarding ICT product tariffs under WTO review.

A significant breakthrough was the recent settlement of multiple trade disputes with the US, signaling strengthened trade relationships despite existing frictions over ICT products.

In conclusion, India’s import-export landscape reflects resilience amidst global volatility, supported by proactive policy measures and strategic trade partnerships.

Continued adjustments and global trade diplomacy will shape India’s trade prospects in the coming months.