India’s Exports Hit Record $821B Despite Global Tensions
India’s exports surged to $821 billion in FY 2024-25, defying global headwinds and tariff threats from the US and EU.
India’s Export Boom Defies Global Trade Storms
In a remarkable feat, India has set a new record in exports, crossing $821 billion in the fiscal year 2024–25—despite a volatile global trade environment. With rising geopolitical tensions and a looming tariff war between the world’s biggest economies, India’s performance has not only drawn attention but also showcased the country’s growing adaptability and strategic foresight in international trade.
Historic Export Growth Backed by Resilience
India’s combined export earnings, including both merchandise and services, marked a 5.5% growth over the previous fiscal year. This expansion, while moderate, reflects a robust and diversified export engine—one that withstood inflation pressures, supply chain disruptions, and increased global protectionism.
According to SC Ralhan, President of the Federation of Indian Export Organisations (FIEO), this performance underscores the resilience of Indian exporters amid unprecedented global uncertainties. However, he noted that sustaining this growth would require continued policy backing, particularly in the face of emerging tariff threats.
Tariff Threats from the US Loom Large
One of the biggest hurdles India faces is the renewed trade friction with the United States. Earlier this year, a 26% reciprocal tariff on Indian goods was announced—though currently suspended for 90 days, allowing room for diplomatic negotiation. At present, Indian exports are subject to an incremental 10% tariff in the US market.
Officials close to the matter have indicated that a bilateral trade agreement (BTA) between India and the US is on an accelerated track, with hopes pinned on finalizing a first tranche by September or October 2025. This would be a strategic win for India, particularly as the US imposes a steep 145% tariff on Chinese goods, leaving open potential for India to fill some of the resulting gaps in global supply chains.
Early Harvest Deals on the Horizon
To navigate global headwinds and seize emerging opportunities, India is actively pursuing a series of “early harvest” trade agreements. These are limited-scope deals that lay the groundwork for broader free trade agreements (FTAs) down the line.
Notably, India is eyeing early harvest pacts with both the United States and the European Union. The model mirrors its 2022 trade strategy with Australia, where a phased approach to FTAs built long-term confidence and cooperation between the nations. Negotiations with the United Kingdom for a comprehensive FTA are also in advanced stages.
A government official, requesting anonymity, noted that both the US and Indian sides are showing urgency and focus, increasing the likelihood of an agreement well before the year-end deadline.
Shifting Supply Chains: India’s Strategic Advantage
The ongoing tariff standoff between the US and China—where tariffs as high as 145% and 125% have been imposed respectively—has sparked fresh fears of a global trade war. Yet, for India, this tension presents a silver lining.
As companies seek to de-risk their supply chains and move operations out of China, India stands as a viable alternative. With a large labor force, improving infrastructure, and government-backed manufacturing incentives, India could emerge as a preferred export and production hub in the Indo-Pacific.
Experts Urge Proactive Policy Measures
While India’s export story is a bright spot, economists caution against complacency. Aditi Nayar, Chief Economist at ICRA, observed that recent merchandise export data contradict assumptions of accelerated pre-tariff shipments, resulting in a larger-than-expected trade deficit. This, she suggests, highlights the need for a carefully crafted export strategy amid uncertain tariff timelines.
She and other experts emphasize the importance of agility in trade negotiations, deeper logistics reforms, and stronger export credit support to maintain the upward trajectory.
Conclusion: Strategic Diplomacy and Supply Chain Agility Key to Future Growth
India’s record-setting export numbers are not just a reflection of strong demand—they’re a testament to strategic planning, adaptive policymaking, and diplomatic engagement in a highly uncertain global environment. While tariff battles between larger economies rage on, India has an opportunity to solidify its position as a reliable trade partner.
But sustaining this momentum will require more than optimism. As global trade alliances shift and new economic power centers emerge, India’s next move—especially on free trade agreements—could well determine the pace and shape of its growth for years to come.
Disclaimer:
The information in this article is based on publicly available data, expert commentary, and early government reports. Figures and policy developments are subject to change. Readers are advised to consult official sources for the most current updates.
source : Hindustan Times