India’s trade sector is holding firm amid global disruptions, navigating protectionist shifts and supply chain upheavals, according to the Economic Survey 2024-25, tabled on January 31 by Union Finance Minister Nirmala Sitharaman. With total exports — spanning both merchandise and services — growing at 6% in the first nine months of the financial year, the country has demonstrated resilience despite an increasingly complex international trade environment. Imports, too, grew at 6.9%, reflecting steady demand and supply dynamics.
The Survey highlights that services and non-petroleum, non-gems and jewellery exports recorded a robust 10.4% growth. This performance underscores the competitiveness of India’s manufacturing, agriculture, and services sectors, even as global trade battles a host of challenges.
Shifting trade landscape and rising barriers
A volatile mix of geopolitical events — including the Red Sea crisis, the war in Ukraine, and drought conditions in the Panama Canal — has unsettled global trade routes, exacerbating uncertainties for exporters. Rising protectionism has added another layer of complexity, with a notable increase in Non-Tariff Measures (NTMs) restricting trade.
According to the Survey, Technical Barriers to Trade (TBT) now impact 31.6% of global product lines, covering 67.1% of international trade as of December 2024. Export-related restrictions affect 19.3% of product lines and influence over 31.2% of global trade. Agriculture, manufacturing, and natural resources are among the sectors most affected by these trade constraints.
India’s trade strategy: Expanding FTAs and diversifying exports
Recognizing these shifts, India is actively pursuing a forward-looking trade roadmap. A key aspect of this strategy involves negotiating Free Trade Agreements (FTAs) to secure better market access. The UAE-India Comprehensive Economic Partnership Agreement (CEPA), signed in 2022, has already lowered textile tariffs and provided Indian manufacturers with a competitive edge. Negotiations with the European Union and the United Kingdom are also progressing, aimed at expanding India’s trade footprint.
Beyond securing trade deals, India is diversifying its export basket and tapping into new markets. By broadening its product range and targeting high-demand sectors, the country is working to mitigate external trade shocks and reduce dependence on traditional markets.
Services exports: A global leader in IT and business services
India’s services exports continue to thrive, accounting for a growing share of global trade. The country’s contribution to global services exports has more than doubled since 2005, reaching 4.3% in 2023.
In the ‘Telecommunications, Computer, & Information Services’ category, India holds a commanding 10.2% share of the global market, ranking as the world’s second-largest exporter. This strength stems from the country’s leadership in IT outsourcing, software development, and digital services. As the hub for Global Capability Centres, India’s ability to sustain its growth in this sector will depend on continuous investment in skills and policy interventions.
Meanwhile, India ranks third globally in ‘Other Business Services,’ holding a 7.2% share. Professional and consulting services remain a major contributor, with new growth opportunities emerging in tourism, transport networks, and e-commerce. The rise of digital platforms, online payments, and AI-driven consumer engagement is expected to drive India’s e-commerce exports in the coming years.
Boosting trade: Infrastructure and digital initiatives
To strengthen India’s export ecosystem, the government is focusing on infrastructure development and policy-driven trade facilitation. The Directorate General of Foreign Trade (DGFT) has launched the ‘Trade Connect e-Platform’ — a single-window digital tool designed to help exporters identify and access new markets.
Developed in collaboration with the Ministry of MSME, EXIM Bank, Department of Financial Services, and the Ministry of External Affairs, the platform aims to address information gaps and offer real-time trade insights. This initiative is expected to be particularly beneficial for small and medium enterprises, enabling them to integrate into global supply chains more efficiently.
Global trade shifts and India’s evolving strategy
Chief Economic Advisor (CEA) V. Anantha Nageswaran pointed out that trade and investment flows are increasingly being viewed through the lens of strategic competition. “The value of trade affected by new import restrictions was just $170 billion in 2014-15, but has now risen to over $1.3 trillion,” he stated, highlighting the sharp rise in trade restrictions globally.
As India navigates these evolving trade dynamics, the challenge will be to balance economic expansion with strategic risk management. With targeted policy interventions, expanding trade agreements, and digital transformation, the country is positioning itself to adapt to the changing global order.