Historic Surge in Exports
India has achieved a milestone in its trade journey, with total exports of goods and services reaching a record‑breaking $824.9 billion in fiscal year 2024–25. This marks a solid 6 percent increase over FY24’s $778 billion, despite headwinds such as high global interest rates, elevated shipping costs, and geopolitical uncertainties. With service exports alone contributing approximately $387.5 billion, a 13.6 percent year‑on‑year growth, the services sector clearly stole the spotlight.
Services: The Powerhouse of Growth
Information technology and digital services were prime movers: telecommunications, computer and information services, financial services, and travel all reported strong gains, bolstering India’s reputation as a global digital economy hub. In March 2025, service exports rose 18.6 percent compared to a year earlier, rising to $35.6 billion, underscoring the resilience and momentum in these sectors.
Merchandise Exports Show Strong Non‑Oil Lending
Merchandise exports also had a strong outing, especially in non-petroleum categories, reaching about $374 billion, up 6 percent from FY24. This performance reflects the impact of targeted policy initiatives such as Production‑Linked Incentive (PLI) schemes and improved logistics and port infrastructure.
Economic Resilience in Turbulent Times
India’s export growth persisted despite significant global disruptions, from the Red Sea crisis to persistent geopolitical tensions in Ukraine and the Middle East, as well as protectionist trade policies. Technical barriers now cover nearly two‑thirds of global trade lines, but India’s strategic responses, such as price competitiveness and market diversification, have helped maintain upward momentum.
Trade Barriers and Policy Responses
The Economic Survey 2024–25 underlined the rise in technical barriers to trade and non-tariff measures globally. In response, it recommended a strategic trade roadmap focused on reducing trade costs, simplifying compliance, and negotiating Free Trade Agreements (FTAs).
FTAs and Tariff Reforms Gaining Traction
India is making headway in trade negotiations worldwide. FTAs are being actively pursued with the EU, UK, US, and other trading blocs. Finance Minister Sitharaman clarified that India simplified customs duties into eight slabs, including a zero‑rate, countering notions of it being a “tariff‑king.”
The Commerce Ministry notes that a successful US‑India trade deal could significantly energize exports, while ongoing early‑harvest pacts with the EU and UK are already bearing fruit.
Future Targets: $900 Billion and Beyond
The Commerce & Industry Minister predicts India’s exports could exceed $900 billion in FY26, riding on sustained global demand and new trade agreements. Meanwhile, the Federation of Indian Export Organisations (FIEO) forecasts exports could touch $1 trillion by FY26 armed with healthy order books and new market traction.
Challenges Lurking Ahead
Interest‑Rate Pressures: FIEO president SC Ralhan has flagged concerns over high domestic interest rates hindering export competitiveness; demand for interest subvention is growing.
Tariff Uncertainty: Delays in concluding major trade agreements, especially with the US, are seen as potential speed bumps.
Geopolitical Risks: Continued global trade disruptions could impede supply chains and slow down export momentum.
Strategic Strengths and Structural Transformation
India is witnessing a structural pivot with services now complementing merchandise as the backbone of its export profile. India’s share in global services exports has grown steadily, now at over 4 percent, fuelled by dominance in IT and business services, with India ranking second and third in key areas respectively.
Final Word
FY25’s export achievement of $825 billion is more than just a number, it’s proof of India’s resilient trade machinery and strategic foresight. As the nation embraces new trade deals, diversifies markets, and refines policies, it stands poised to redefine its global trade role. But to turn potential into performance, sustained efforts and nimble policy moves will be key. India’s ascent as a trade powerhouse is underway, and the world is watching.
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