India Expands Export Horizons Amid Geopolitical Shifts: Economic Survey 2023-24

According to the Economic Survey 2023-24, Indian exporters are exploring new markets to mitigate global uncertainties caused by geopolitical tensions. Strong trade relations across regions and diversified partners have bolstered India's external sector. Notable growth was observed in merchandise and services exports, with India targeting USD 800 billion in exports this fiscal.

Indian exporters are broadening their geographical reach to promote outbound shipments and navigate global uncertainties stemming from geopolitical tensions, according to the Economic Survey 2023-24.

Despite the prevailing geopolitical dynamics, India's strong trade relations across various countries are expected to be beneficial. The survey highlighted India's diversified trade relationships with Asia, Europe, and the US.

The external sector has remained resilient amid geopolitical headwinds and persistent inflation concerns. By adding more export destinations, India is signaling a strategic regional diversification of its exports. Government data shows a declining trend in the share of the top 10 countries in India's merchandise exports, falling from 61.9 percent in FY2000 to 50.5 percent in FY24.

Newer export destinations like the UAE, Singapore, Hong Kong, and China have emerged, replacing traditional partners such as the UK, Germany, and Belgium. The share of Asian and African regions in India's total exports has risen from around 42.9 percent in 1999-2000 to 52 percent in 2023-24. During the last fiscal, the UAE, Singapore, China, Russia, and Australia were major export partners.

Merchandise exports in April-June of this fiscal increased by 5.84 percent to USD 109.96 billion, while imports grew by 7.6 percent to USD 172.23 billion, resulting in a widened trade deficit of USD 62.26 billion. India's global merchandise export share stood at 1.8 percent in 2022, and its share in global services exports rose to 4.3 percent in 2022-23.

The commerce ministry targets USD 800 billion in goods and services exports this fiscal, up from USD 778 billion in 2023-24. India's services export CAGR has significantly outpaced merchandise export growth over the past 30 years.

The country has risen to become the seventh-largest services exporter globally and a key player in telecommunication, computer, and information services. Integration into global value chains and increased foreign investment in sectors like electronics, apparel, and automobiles are driving this export momentum.

After a decade, four new Free Trade Agreements (FTAs) were signed between 2021 and 2024, focusing on Western and African markets. India's youth and growing middle class make it an attractive market for Western FTA partners.

(With inputs from agencies.)