In the first half of fiscal year FY25, India’s export landscape witnessed a mixed performance across sectors. While traditional exports such as petroleum products and gems & jewelry experienced significant declines, other sectors like pharmaceuticals, electronics, and engineering goods showed notable growth. This shift signals the emergence of new export drivers, creating opportunities for diversified growth in the coming quarters.

Key Highlights of India’s Export Performance (April-September 2024):

1. Total Merchandise Exports: India’s merchandise exports reached $213.22 billion in H1 FY25, registering a marginal 1% year-on-year growth.
2. Engineering Goods: This sector contributed 25% of the total export value, growing by 5.27% annually to $56.24 billion. Engineering goods remain the backbone of India’s export portfolio.
3. Electronic Goods: Exports in this category soared by 19.74%, reaching $15.64 billion, driven by increased global demand for semiconductors, consumer electronics, and communication devices.
4. Pharmaceuticals: India’s pharmaceutical exports rose by 7.99% to $14.43 billion, underscoring the country’s robust position as a global supplier of medicines and active pharmaceutical ingredients (APIs).
5. Chemicals: The export of organic and inorganic chemicals rose by 4.57% to $14.11 billion, highlighting India’s growing presence in the global chemicals market.
6. Gems and Jewelry: Traditionally a key export sector, gems and jewelry exports fell sharply by 10.89% to $13.92 billion, reflecting softer demand in major markets.
7. Petroleum Products: Exports of petroleum products declined by 12.48% to $36.54 billion, influenced by fluctuating crude oil prices and geopolitical factors.

Impact of Global Factors on India’s Trade: Several external factors impacted India’s trade performance during the period. The Houthi attacks on ships, rising crude oil prices due to the prolonged Russia-Ukraine war, US-China trade tensions, and new European Union regulations (such as the proposed carbon tax and forest protection laws) created uncertainties. These issues exerted pressure on India’s traditional exports, particularly petroleum products and gems & jewelry.

Future Prospects for Trade Growth in 2025: The World Trade Organization (WTO) projects a gradual recovery in global merchandise trade volumes, with an expected growth rate of 2.6% in 2024 and 3.3% in 2025. This rebound is anticipated to benefit India’s export sector, especially with ongoing efforts to expand into emerging markets and diversify export portfolios.

With key export destinations such as the United States, the UAE, the Netherlands, the UK, and China, India has positioned itself strategically in the global trade arena. However, a sharp rise in the trade deficit, which surged by over 24% in April-September 2024-25, will require continuous monitoring of external sector conditions and timely corrective measures.

Key Data Table: India’s Export Performance (April-September 2024)

Export Sector	Export Value (Billion USD)	YoY Growth (%)
Total Merchandise Exports	213.22	1.00
Engineering Goods	56.24	5.27
Electronic Goods	15.64	19.74
Pharmaceuticals	14.43	7.99
Organic & Inorganic Chemicals	14.11	4.57
Petroleum Products	36.54	-12.48
Gems and Jewelry	13.92	-10.89

Outlook for Q1 2025:

India’s export sector is expected to continue its growth momentum in emerging industries like electronics, engineering goods, and pharmaceuticals. However, monitoring the external trade environment, especially the evolving geopolitical landscape and regulatory changes in major markets, will be crucial. The government may need to adjust its export strategies to cushion the impact of rising trade deficits and optimize India’s export potential in the forthcoming quarters.

A focus on enhancing trade ties with existing partners while exploring new markets will be essential for sustaining export growth through Q1 2025 and beyond. As global trade is expected to recover, India could benefit from this uptick by further diversifying its export base and improving its competitiveness in high-growth sectors.

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