E-Paper
India reports record exports of $821 billion despite global headwinds
Data showed that India’s overall exports were led by services in FY25 as the growth in merchandise shipments almost remained flat at $437.42 billion compared to $437.07 billion in FY24
India on Tuesday reported record exports of over $821 billion in 2024-25 on the back of healthy merchandise shipments and robust services exports despite global headwinds although the government’s optimism about this year’s prospects depend on ambitious early harvest bilateral free trade deals with at least two the US and the European Union. The first, especially is crucial for it will help India dodge the reciprocal tariff levied by the US. President Donald Trump announced the 26% tariff on India, but then suspended all reciprocal tariffs for 90 days. The current incremental tariff on Indian goods exported to the US is 10%.
Announcing provisional trade data for the month of March and the full financial year of 2024-25, commerce secretary Sunil Barthwal said that services data for the month of March is a “conservative” estimate, and India’s actual exports in FY25 may exceed $821 billion.
According to the data, India’s overall exports (merchandise and services combined) in 2024-25 were $820.93 billion as compared to $778.13 billion in 2023-24, registering 5.5% growth. Overall imports in FY25 saw 6.85% growth to $915.19 billion against $856.52 billion in FY24, leading to a higher trade deficit. The trade deficit rose from $78.39 billion in 2023-24 to $94.26 billion in 2024-25,a jump in excess of 20%.
Data showed that India’s overall exports were led by services in FY25 as the growth in merchandise shipments almost remained flat at $437.42 billion compared to $437.07 billion in FY24. Goods imports, however, jumped by 6.2% to $720.24 billion in FY25 against $678.21 billion in FY24.
Services were the bright spot with exports exceeding imports. India exported services worth $383.51 billion in FY25 as compared to $341.06 in FY24, a 12.45% jump. Imports, however, saw a 9.33% annualised increase to $194.95 billion in FY25 from $178.31 billion in FY24.
Commerce ministry officials said trade for the month of March this year largely remained unaffected . While merchandise export growth in March remained almost flat (it grew marginally by 0.67% on an annualised basis) to $41.97 billion, imports rose by 11.36% to $63.51 billion in the month. The trade deficit in March stood at $21.54 billion, according to the commerce ministry’s data released on Tuesday.
Major growth drivers in merchandise exports included engineering goods, electronics items, pharmaceuticals, ready-made garments, and agricultural commodities such as rice, cotton coffee, spices, tea and tobacco. “India has done extremely well,” Barthwal said citing the government’s strategy of having specific focus on 20 countries, six merchandise sectors and six services sector, besides “continuous engagements” with stakeholders, export promotion councils (EPCs), Indian missions abroad and line ministries.
Speaking about the US government’s reciprocal tariffs which came into effect in April, he said they pose both, “challenges and opportunities” for India because leaders of the two countries (Prime Minister Narendra Modi and President Donald Trump) havew decided to negotiate a “mutually beneficial” bilateral trade agreement (BTA). The target is to finalise the first tranche of BTA by September-October 2025, he said. An official requesting anonymity added that “negotiations between India and US could also conclude before the deadline as both parties are intensely engaged.”
To be sure, with the US levying a 145% tariff on China, and Beijing reciprocating with a 125% one on US goods, the world is looking at a possible trade war between its two largest economies, although countries such as India could also benefit from opportunities to replace China in global supply chains.
The official added that it is also likely that India and the EU could also have an early harvest deal and a more comprehensive free trade agreement would be negotiated later, as was the case with India’s FTA with Australia in 2022. An early harvest scheme (EHS) typically precedes a comprehensive FTA between two partners and helps build confidence. India is also in the process of finalising a full FTA with the United Kingdom.
Aditi Nayar, chief economist & head - Research & Outreach, ICRA said, “The merchandise export data belied expectations of a front loading of shipments ahead of the proposed tariffs, contributing to a higher-than-expected deficit figure.”
“India’s overall exports grew by a healthy 5.5% in FY 2024-25, reflecting the resilience of the export sector amid rising global geopolitical tensions and trade disruptions,” FIEO president SC Ralhan said. He, however, called for strategic support to sustain export momentum, amid the ongoing tariff war.
