India Trade: Climbing Up the Ladder of Merchandise Exports
India’s trade performance in FY24 witnessed a mix of ups and downs. While exports to the US saw a slight decrease of 1.32 percent, amounting to US$77.5 billion, imports from the US declined by approximately 20 percent, settling at US$40.8 billion. According to data from the commerce ministry, China held the position of India’s primary trading partner from 2013-14 to 2017-18, and then again in 2020-21.
India’s Key Trading Partners
Prior to China’s dominance, the UAE occupied the top spot as India’s largest trading partner. However, in FY24, the UAE ranked third with a trade volume of US$83.6 billion. Following closely were Russia with US$65.7 billion, Saudi Arabia with US$43.4 billion, and Singapore with US$35.6 billion in trade with India.
Free Trade Agreements Boost Merchandise Exports
India’s trade with key free trade agreement (FTA) partners saw impressive growth in merchandise exports during FY24. Imports from FTA partners like South Korea, Japan, Australia, UAE, Mauritius, ASEAN, and SAFTA exhibited a robust 38% growth rate. This outpaced India’s overall merchandise exports growth of 31.4%. Specifically, India’s merchandise exports to these FTA partners reached $187.92 billion.
In contrast, India’s total merchandise exports stood at $675.45 billion during the same period. The strong performance of trade with FTA partners highlights India’s successful efforts to boost exports through strategic trade agreements.
Climbing Up the Ladder of Merchandise Exports
The position in India among merchandise exporters improved from 19th to 17th. Additionally, its share rose marginally from 1.70% to 1.82%. Despite global uncertainties, India expanded exports to 115 countries. Out of 238 destinations, these 115 represent 46.5% of its exports. These 115 destinations include major trade markets like the US and UAE.
Moreover, they include the Netherlands, China, UK, Saudi Arabia, and Singapore. Furthermore, key markets are Bangladesh, Germany, and Italy. Despite economic uncertainties globally, India demonstrated resilience in exports. Consequently, it expanded its reach to new markets successfully.
Services Exports on the Rise
In conclusion, The country’s merchandise exports declined by 3% to $437.1 billion. However, this decline was offset by an increase in services exports. Services exports rose to $341.1 billion in 2023-24. Compared to 2022-23, this marked an increase from $325.3 billion.
Consequently, India’s overall trade performance showed resilience despite global uncertainties. Moreover, India is strengthening free trade agreements. Additionally, it is expanding its global trade presence. As a result, positive trade results are expected in coming years.