India’s Exports Likely To Touch $1000 Billion By 2024-25

A further enhancement is brought to the country’s trade ecosystem with the launch of Foreign Trade Policy 2023 with its five key ‘D’ elements of duration, dynamism, decentralisation, direction and disaster proofing

The PHD Research Bureau conducted an analysis on the growth dynamics of India’s exports. The dynamic policy environment provided by the government, double-digit growth in services exports along with the efforts to connect with global value chains (GVCs) will help India to reach $one trillion by 2024-25 and double tha by 2029-30.

In fiscal year 2024, the export value of goods and services as a part of the GDP was estimated to be around Rs. 65 trillion, which is an increase from the previous year's export value.

Exports of goods and services reported at 21.89 per cent of GDP in 2023, according to the World Bank collection of development indicators, compiled from officially recognized sources.

India - Exports of goods and services (percentage of GDP) - actual values, historical data, forecasts and projections were sourced from the World Bank this month. Exports of goods and services represent the value of all goods and other market services provided to the rest of the world. They include the value of merchandise, freight, insurance, transport, travel, royalties, license fees, and other services, such as communication, construction, financial, information, business, personal, and government services.

The growth in export volumes of top 25 export destinations and top 25 exported commodities was analysed from FY 2018-19 to FY 2022-23, based on which they are classified as high, strong, moderate and weak growth export destinations and commodities. The top 10 highly growing export destinations have shown a consistent growth during the last five years (FY 2019 to FY 2023 average) in percentage terms, including Togo (73), the Netherlands (36), Brazil (28), Israel (27), Indonesia (24), Turkey (22), Australia (20), South Africa (19), Saudi Arabia (16) and Belgium (13). Exports to these countries have grown at high growth rate amidst the global economic slowdown.

India performed well in merchandise trade despite lowering in global demand with exports crossing $ 776 billion and imports reaching $898 billion in FY23. With this, merchandise trade deficit narrowed to $ 238.3 billion in FY24 compared to USD 264.9 billion in the previous year.

There was a slowdown in India’s major exporting partners (especially the EU, whose real GDP grew barely by 0.6 per cent in 2023, compared to 3.6 per cent growth in 2024), along with the lagged impact of monetary tightening carried out by many countries to control rising inflation.

The survey notes that adverse trade environment in 2023 is expected to ease somewhat this year and next, boosting goods trade in 2024 and 2025. World merchandise trade volume is expected to grow at 2.6 per cent and 3.3 per cent in 2024 and 2025, respectively, as demand for traded goods rebounds.

India’s exports of engineering goods, electronic goods and drugs and pharmaceuticals increased in FY24 on a YoY basis. India’s share in world electronics exports also improved. India maintained a strong foothold in the drugs and pharmaceuticals sector.

These countries are emerging major growth destinations for India’s exports though the volumes have to pick up in the coming times.

The top 10 highly growing export commodities have shown a consistent high growth during the last five years (FY 2019 to FY 2023 average) including sugar and confectionary (43 per cent), mineral fuel and oils (36 per cent), electrical machinery and parts (27 per cent), aluminum and articles (18 per cent), inorganic chemicals, precious and rare- earth metals (16 per cent) miscellaneous chemical products (16 per cent), cereals (14 per cent), iron and steel (12 per cent), ships, boats and floating structures (11 per cent), rubber and articles (11 per cent) and optical, photographic and medical apparatus (10 per cent).

The high growth-high volume export commodities have significant potential to enhance India’s exports growth to new highs. A further enhancement is brought to the country’s trade ecosystem with the launch of Foreign Trade Policy 2023 with its five key ‘D’ elements of duration, dynamism, decentralisation, direction and disaster proofing. It has been launched to enhance exports by creating an enabling ecosystem for exporters, promoting and developing each state to integrate with the GVCs and make India’s trade resilient to the volatility of global business environment.

To boost export growth, India is targeting 20 countries of significance and six major sectors including engineering goods, textiles and apparels, electronics, pharmaceuticals, chemicals and plastics, and agriculture and allied products.

According to data from the Ministry of Commerce and Industry, exports contracted by 1.5 per cent annually to $34 billion this July. Exports averaged $7.61 billion from 1957 till 2024, reaching an all-time high of $44.57 billion in March 2022 and a record low of $0.06 billion in June of 1958.