The exports of India are also started growing. Unlike in the past where textiles, gems and low-value agricultural products controlled its export basket, there is increasing proportion whereby high-tech and value added sectors are driving the export basket. This shift is part and parcel of the larger economic aspiration of India to be a manufacturing nation, more competitive in the global context, and achieving its $1 trillion export potentials. In the following sections, we will discuss the main areas that drive this change, the enablers in policies that enable this change and the future challenges.
1. The New Drivers: Four Pillars of Growth in Exports in India
(a) Engineering Goods
Engineering goods exports grew by 6.74 % from $ 109.30 billion in FY 2023-24 to $ 116.67 billion in FY2024-25. MoCI,World Trade Scanner, Outlook Business These exports include equipment and machinery, industrial equipment, auto parts and transport equipment among other capital goods. This constant rise in exports of engineering is a sign of growing sophistication in manufacturing in India and its ability to compete in the global supply chain. India Seatrade News
(b) Electronics
Electronics has proven to be the most growing export in India. The exports of electronic goods increased by a huge margin of 32.46 to $38.58 billion (as compared to 29.12 billion in the FY 2023-24). The Times of India The key drivers here are computer hardware and peripherals that have increased twofold ($0.7 billion to $1.4 billion) in a single year.(MoCI, Business Standard) The main export destinations are UAE, the U.S., the UK, the Netherlands and Italy. The Times of India
(c) Pharmaceuticals
Another competent sector in India is pharmaceuticals. In FY 2024-25, India pharmaceutical exports increased by 9.4% to $30.47 billion indianewsnetwork, showing that India is a reliable global supplier of its products in the pharmaceutical industry. indianewsnetwork
(d) Agriculture and Allied Products
Agriculture is one of the most important export industries of India, that has contributed a lot in terms of forest exchange incomes as well as the lives of the rural population. Agri and allied exports exceeded $51.86 billion in FY 2024-25, and on an annual basis, the value increased by 7.36%. The Daily Jagran The main key export items in the Daily Jagran are rice (especially basmati), spices (turmeric, ginger, and chili), coffee, tea, fruits and vegetables, sea products, and tobacco. Particularly interesting is the export of rice by SEFPL India: this country is among the biggest world suppliers of rice and contributes a significant portion of the world rice trade. SEFPL
The four sectors engineering, electronics, pharmaceuticals and agriculture, comprise more than half of Indian merchandise export in FY 2024-25, indicating the extent to which the country has changed its export focus to high-value, innovation-driven products. Business Standard
2. Strategic Enablers: Policies and Initiatives that will enhance Export Growth
The export boom experienced by India in these industries is not by chance, it is supported by a package of planned policy decisions and intended government programs. Key enablers include:
a) Production-Linked Incentive (PLI) Scheme.
Electronics and engineering industries have been benefiting under PLI scheme. It has also promoted scale investments, home value addition, and export-driven production particularly in the mobile phones, industrial machines, and green technology by giving performance-based incentives to manufacturers. Invest India
b) Make in India Push
Make in India program is ongoing in motivating international companies to produce in India. As an example, the production of Indian mobile phones has burst out of proportion and its exports, which were very low in 2014-15, have increased to a huge export base in 2024-25. Invest India
c) Foreign Trade Policy 2023
The present foreign trade policy by the government eases its procedures, encourages remitance-centered incentive, and enhances the expansion of export centers (district level export centers and SEZs) which enhance the export ecosystem. Dhyeya IAS
d) Diversification & Market Access.
India is going on a spurt to diversify export markets in parallel to increase its capacity. The strategy involves strengthening trade relations, negotiating free-trade agreements, and helping companies to penetrate new geographies. Invest India
e) Infrastructure & Logistic Improvements.
Enhancing the efficiency of ports, reducing the cost of shipping and establishing superior warehousing infrastructure are essential towards overall decreasing the cost to export in Indian companies. Although these challenges still exist, the government has focused on reforms in the logistics so as to render exporters competitive.
3. Opportunities & Advantages
- Affordable Costs of manufacturing: With rising automation and skilled manpower, India is a good base to consider in mid- and high-tech manufacturing.
- Skilled Workforce: India has a high pool of engineers, scientists, and other professionals to exploit the complicated production and R&D.
- Globally Demand Tailwinds: The increasing demand of electronics (particularly smartphones and semiconductors), sustainable movement (EVs and elements), and inexpensive generics offer enormous market opportunity.
- Trade Resilience: India is not so dependent on some commodities or geographies because of its diversification on its export basket and markets.
- Rural-Driven Growth Agri exports are rural income earners with inclusive benefits and help farmers have access to global markets through modern value chains.
4. Challenges & Risks
Regardless of the momentum, the strategy of exports by India has to get through a number of headwinds:
i) Infrastructure Bottlenecks: Port congestion, increased turnaround times and transport inefficiencies might wipe out the benefits of increased production.
ii) High Input Costs: In such industries as electronics, the cost of raw materials or intermediates (e.g., semiconductors) can remain imported, too.
iii) Talented Workforce deficiency in some regions: Engineers are a plenty, but specific skills (e.g. in semiconductor manufacturing), are limited.
iv) Global Trade Risks: Tariff shock, geo-political shocks and supply chain fragmentation can be a risk to exporters.
v) Environmental and Sustainability Constraint: The exports of Agriculture rely on the water-intensive crops; the development of manufacturing must be equitable in the carbon emissions, waste, and energy consumption.
5. The Road Ahead: Strategic Priorities
India must take into account the following strategic priorities to continue with the same export momentum:
- Enhancing Value Addition: Continue the trend of value addition of electronics, engineering and pharma at home to lessen dependence on imported inputs.
- Research and Development and Innovation: Promote government-corporate investments in research and development, particularly in biotechnology, semiconductors and green technologies.
- Export Finance and Risk Mitigation: Enhance access to export finance, insurance and hedging products by MSMEs.
- Sustainability Focus: Advance sustainable food production, environmentally-friendly manufacturing processes and resilient supply chains to climate change.
- Market Diversification: Keep negotiating trade agreements (FTAs) and venturing into new markets Africa, Latin America and southeast Asia.
- Capacity Building: Invest in the skill development networks to equip the workforce with high-tech manufacturing and services.
Conclusion
The export policy of India is also changing fast- it is moving away with low-value products and moving towards innovation-based production and diversified international exports. India currently exports over half of its merchandise including electronics, pharmaceuticals, agriculture with engineering goods as its core. The emergence of this change has been made possible by radical policy actions such as PLI program and the Make in India initiative, though, maintaining this momentum may take further investment in infrastructure, skills, sustainability and access to the global market.
Through proper card playing, India can become a hub of high-value manufacturing not only in the manufacture of its own products, but also in the manufacture of the world. This would not only boost its economic development but also boost its geopolitical/trade position in the decades ahead.
Disclaimer:
This article is intended solely for informational and educational purposes. The data, opinions, and analysis presented here are based on publicly available information and general industry sources. Nothing in this article should be interpreted as financial, investment, legal, or professional advice. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial or business decisions. The author and publisher assume no responsibility for any errors, omissions, or outcomes resulting from the use of this information. All examples are illustrative and may not reflect current market conditions or future performance.
