New Delhi: India’s exports basket is not aligned with global demand as nearly 66 percent of world’s merchandise imports are concentrated in products where New Delhi’s export share stands at just 0.2 percent, Niti Aayog CEO B.V.R. Subrahmanyam said Monday.
On the other hand, products where only three percent of global merchandise import takes place, India’s export share globally is 18.2 percent, according to the think tank’s quarterly trade watch (Q4-FY2025) report launched Monday.
“This shows our trade is imbalanced. It is concentrated in a few products and it is concentrated in the wrong products,” Subrahmanyam said at the launch of the report. “We trade in stuff, which the rest of the world doesn’t require in large quantities.”
According to Subrahmanyam, while the world has moved on to trade high value items like electronics and automobiles, India’s trade is stuck with cash crops like jute, tea, coffee, cotton and the likes.
According to the report, India’s position remains very limited in large-demand items such as electronic circuits, petroleum oil, gold, and medicines, which together represent $15.9 trillion of global demand. “Diversifying into these high-demand sectors is essential to align India’s exports with world trade patterns and scale them sustainably,” says the report.
Between 2005 and 2024, India’s share in world merchandise exports increased from 1 percent to 2 percent, while China’s has more than doubled from 7 percent to 15 percent, the report adds.
To overcome the trade imbalance, Subrahmanyam recommended focussing on improving competitive manufacturing while also opening up markets to allow free flow of trade.
“If you try to protect (industries/sectors] by cutting out imports, you will not be able to export either,” he said.
Citing an example, he added that China is the biggest exporter of the world and yet also the second largest importer.
To improve competitiveness in manufacturing, Subrahmanyam recommended making key manufacturing essentials like capital, land, labour and utilities more efficient, accessible and less expensive.
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Enhancing trade with Asian partners
According to the report, India’s biggest export markets in the last quarters of FY2025 were the United States, the United Arab Emirates, the Netherlands, China and the UK, accounting for 42 percent of total exports.
While in terms of imports, India’s top markets were China, the United Arab Emirates, Russia, and the United States, contributing around 39 percent of total imports.
According to Subrahmanyam, there is a need for India to expand its trade markets to Asian countries like Japan, South Korea, Singapore among others.
“The most incremental growth in trade over the next 20 years would come from Asian countries. We are currently stuck with old markets but there is a growing market in Asia where we need to enhance our presence.”
India’s overall trade analysis
According to the report, India’s total trade in FY 2025 stood at US$ 1.73 trillion, growing 6 percent from the previous fiscal. The total exports this financial year were US$ 823 billion, while imports stood at US$ 908 billion thereby resulting in a trade deficit of around US$ 85 billion.
The growth in the overall trade primarily came from services exports that grew by 13.6 percent during the year to reach US$ 387.5 billion, supported by sectors like telecom, information technology and business services.
On an overall basis for FY 2025, non-petroleum merchandise exports for India reached US$ 374.1 billion, rising 6.0 percent from US$ 352.9 billion in FY 2024. However, in the fourth quarter of FY2025, merchandise exports declined by 4 percent to reach US$ 115 billion while imports grew marginally (by 2 percent) to reach US$ 175 billion.
(Edited by Ajeet Tiwari)
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