India’s export performance has reached remarkable heights, marking a 6.01% increase year-on-year to an unprecedented $824.9 billion for the fiscal year 2024-25. This impressive growth is largely driven by a 13.6% boost in services exports, which soared to a record $387.5 billion, as indicated by the final services trade data from the Reserve Bank of India (RBI) released recently.

Surge in Services Exports

In March alone, services exports experienced a significant upswing, jumping 18.6% compared to the same month last year, totaling $35.6 billion. This surge underscores the persistent global demand for India’s robust IT, business, financial, and travel-related services. The RBI’s report highlights how these sectors continue to thrive amidst a shifting economic landscape.

Merchandise Exports on the Rise

The merchandise export sector also played a pivotal role in this upward trend. Exports of non-petroleum goods reached an all-time high of $374.1 billion, reflecting a 6% increase from $352.9 billion in the previous fiscal year. This marks the highest annual figure for India’s non-petroleum merchandise, providing comfort despite challenges faced by traditional goods due to tightening global demand and geopolitical tensions.

Strategic Expansion of Trade

India’s export growth, which was recorded at $778.1 billion in the previous year, coincides with the nation’s strategic efforts to enhance its global trade presence. Through ongoing negotiations for bilateral and multilateral agreements, India aims to solidify its position as a resilient, service-oriented economy amid evolving global supply chains.

• India is actively pursuing free trade agreements with key partners such as the European Union and the UK.
• The country is also working to counteract the impacts of retaliatory tariffs imposed by the United States.

Expert Insights

Economists see this export growth as a testament to India’s increasing competitiveness in both high-value services and diverse goods. According to Abhash Kumar, an economist, the rise in exports showcases the manufacturing sector’s strong rebound, driven by global demand, enhanced logistics, and government incentives through programs like performance-linked incentives.

Despite volatility in petroleum and commodity-linked exports, the steady growth in digitally-driven services and value-added manufacturing signals a significant transformation in India’s export profile.

Trade Relations with the United States

Additionally, India’s trade surplus with the United States surged by 16.6% in 2024-25, rising to $41.18 billion from $35.32 billion the previous year. This growth occurred even as discussions of potential tariff increases by U.S. President Donald Trump loomed.

• Exports from India to the U.S. climbed 11.6%, reaching $86.51 billion compared to $77.52 billion in the previous year.
• On the other hand, imports from the U.S. saw a more modest increase of 7.42%, from $42.20 billion to $45.33 billion.

Overall Trade Deficit

While exports have shown resilience, India’s overall trade deficit widened significantly in March to $21.54 billion, up from a three-year low of $14.05 billion in February. The total merchandise exports for the fiscal year amounted to $437.42 billion, slightly higher than the $437.07 billion reported the previous year, while imports surged to $720.24 billion, an increase from $678.21 billion in 2023-24.

In summary, March saw merchandise exports at $41.97 billion and imports at $63.51 billion, a notable shift from $36.91 billion in exports and $50.96 billion in imports in February. This dynamic landscape underscores India’s evolving role in global trade as it strategically positions itself for future growth.