India’s merchandise exports have faced a downturn since October of the previous year, and recent forecasts suggest that this trend will persist. According to the Global Trade Research Initiative (GTRI), by the end of the current fiscal year, exports are likely to dip below USD 435 billion, a slight reduction from USD 437.1 billion recorded in the previous year. This decline has raised concerns about the stability of India’s export landscape.
Declining Export Figures
In February 2025, merchandise exports fell by 10.85%, totaling USD 36.91 billion. This drop is attributed to fluctuations in petroleum prices and ongoing global uncertainties. GTRI Founder Ajay Srivastava noted that during the April-February period of 2024-25, exports reached USD 395.63 billion, marginally higher than the USD 395.38 billion seen in the same timeframe the year before.
Key Sectors in Trouble
Several critical sectors have recorded negative growth, both for February and cumulatively. These include:
- Petroleum products
- Gems and jewellery
- Ceramic products and glassware
- Oil seeds and oil meals
- Iron ore
These sectors are experiencing consistent declines, signaling an urgent need for strategic interventions to foster recovery, according to Srivastava.
The Impact of Petroleum Prices
The petroleum products sector has been particularly hard-hit, with exports plummeting by 29.23% in February 2025 and 25.56% over the past eleven months. This downturn correlates with a 7.8% decrease in global crude oil prices, which fell from USD 83.5 per barrel in February 2024 to USD 77 per barrel in February 2025. Srivastava emphasized that recovery in this sector hinges on global oil price trends and the need for enhanced refining efficiency to sustain margins.
Engineering Goods Facing Challenges
Even engineering goods, India’s largest export category, experienced an 8.62% reduction in February 2025. However, they did see a 7.97% increase over the eleven-month period. To bolster this sector, the government is encouraged to provide low-cost export credit to alleviate financial burdens on exporters and to incentivize technology upgrades that enhance productivity.
Strategies for Recovery
To address the challenges faced by struggling sectors, experts advocate for targeted policy measures. Implementing these strategies could stabilize key industries and improve the overall export performance of India, ensuring that the country remains competitive in the global trade arena.
In conclusion, with thoughtful interventions and support for critical sectors, India can work towards reversing the current export decline and strengthen its position in international markets.
