India’s merchandise exports for FY2024–25 registered marginal growth, edging up by just 0.08% to USD 437.42 billion, reflecting subdued global demand and persistent domestic challenges. In March alone, outbound shipments rose 0.7% to USD 41.97 billion, while the trade deficit widened to USD 21.54 billion. Amid this sluggish performance, the Federation of Indian Export Organisations (FIEO) has urged the government to bolster support through targeted reforms in credit access, regulatory simplification, logistics, and market diversification. The call for intervention comes at a crucial moment, as India seeks to maintain its foothold in global trade amid tightening geopolitical and economic conditions.
Export Growth Plateaus Amid Global Headwinds
India’s export sector, once a cornerstone of its economic resurgence post-pandemic, is now witnessing signs of stagnation. Merchandise exports for FY25 closed at USD 437.42 billion, barely an uptick from the previous year, registering a meager 0.08% increase. The marginal rise highlights deeper structural constraints, such as reduced global demand, trade volatility, and supply-side inefficiencies.
On a monthly basis, exports in March 2025 stood at USD 41.97 billion, a 0.7% increase year-on-year. While the growth is positive, the pace remains far from the double-digit trajectory needed to meet India’s long-term trade aspirations.
At the same time, the trade deficit for March ballooned to USD 21.54 billion, reflecting the pressure from sustained import dependence, particularly in energy and electronic components. This widening gap also puts stress on the rupee and underscores the need for a strategic reset in trade policy.
FIEO Pushes for Comprehensive Export Support
Reacting to the lukewarm numbers, FIEO President Dr. A. Sakthivel Ralhan emphasized the need for urgent policy intervention to sustain and revive India’s export momentum. In a public statement, Ralhan urged the government to consider a multi-pronged strategy that includes:
- Enhancing export competitiveness through targeted incentives and industry-specific support.
- Diversifying export markets and product portfolios to reduce dependency on a limited number of destinations.
- Addressing logistics bottlenecks, including port inefficiencies and high inland transport costs.
- Improving access to affordable credit, particularly for MSME exporters.
- Easing regulatory burdens that often hamper quick and cost-effective international trade.
Ralhan noted that while macroeconomic fundamentals remain stable, exporters continue to face micro-level friction that impacts productivity and profitability.
Trade Policy at a Crossroads
The stagnation in export figures comes against the backdrop of heightened global uncertainty, with ongoing geopolitical tensions, protectionist tendencies, and fluctuating commodity prices disrupting established trade routes. As economies around the world recalibrate their supply chains, India has a strategic opportunity to step in as a reliable trade partner, but only if it enhances its infrastructure and streamlines compliance frameworks.
The government's Production Linked Incentive (PLI) schemes and trade agreements under negotiation with regions like the European Union and the UK could offer long-term export tailwinds. However, without short-term fiscal and logistical relief, exporters—particularly in labor-intensive sectors like textiles, leather, and handicrafts—may struggle to maintain competitiveness.
Outlook: Fragile Gains and the Need for Reform
India’s export sector is at a critical inflection point. While modest growth was recorded in FY25, the pace is insufficient to achieve the ambitious targets outlined under the government’s five-year foreign trade policy. Sustaining momentum in the face of a global slowdown requires not just resilience but a structural revamp of the way India approaches trade facilitation.
Exporters are looking to the upcoming Union Budget and policy announcements for cues on interest equalization schemes, freight subsidies, and investment in trade infrastructure. Without meaningful intervention, India risks falling behind regional peers like Vietnam and Bangladesh, who continue to gain market share in crucial export categories.
Conclusion: From Caution to Course Correction
India’s export performance in FY25, while not regressive, is a clear warning sign. With the world economy in flux and global supply chains being redrawn, India has a narrowing window to assert itself as a trade powerhouse. The FIEO’s plea is not merely a call for subsidies—it’s a demand for a strategic, long-term export roadmap that fuses financial support with institutional reform.
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