According to NITI Aayog’s quarterly report, which was made public on Monday, India’s trade performance in Q3 FY25 (October–December 2024) demonstrated cautious resilience in the face of geopolitical unpredictability and fluctuating global demand.
At $108.7 billion, merchandise exports showed a 3% year-over-year increase.
Due to rising demand from Saudi Arabia, the United Arab Emirates, and the Czech Republic, the export composition remained steady, with aircraft, spacecraft, and parts rising to the top ten exports by more than 200 percent annually, according to the report.
Since 2014, exports of high-tech goods have increased significantly, with electrical machinery and armaments and ammunition leading the way. Their compound annual growth rate (CAGR) has been 10.6%.
At the report’s release, Dr. Arvind Virmani, Member of NITI Aayog, stated, “The most recent edition of Trade Watch Quarterly, for Q3 of FY 2024-25, offers a timely and data-rich analysis of India’s merchandise and services trade, alongside an in-depth exploration of evolving US trade policies and their implications for India.”
With exports growing by 17% year over year to $102.6 billion and imports jumping by 22.5% to $52.4 billion, the services sector continued to show strength. As a result, the goods deficit was partially offset by a $52.3 billion services trade surplus.
Digitally Delivered Services (DDS) exports more than doubled to $269 billion in 2024, making India the fifth-largest exporter in the world. These exports are driven by professional consulting, IT services, and R&D outsourcing, solidifying India’s standing as a global center for digital trade.
About 40% of all exports were still accounted for regionally by North America and the European Union.
However, the merchandise trade deficit widened as imports increased by 6.5% to $187.5 billion.
The report’s main theme is the changing trade policy of the United States, particularly the implementation of the current US tariff regime from April 2025 to July 10, 2025, and how it affects India’s ability to compete internationally.
In addition to increasing tariffs on particular trading partners including China, Canada, Mexico, Vietnam, and Thailand, the US imposed a base duty of 10% on all imports.
This policy change offers Indian exporters a special strategic opportunity, even though the country’s average tariff exposure is still moderate.
With more than 61% of trade value in the top 30 HS-2 product categories and 52% in the top 100 HS-4 product categories, the data demonstrates that India is well-positioned to increase its market share in a substantial chunk of its exports to the US.
These events demonstrate the US’s strategic significance as India’s top export market and vital growth route.
To capitalize on these advantages, India has to implement complementing policy measures, such as targeted export, stronger integration into global value chains, and a trade agreement with the US that focuses on services. India’s services footprint can be further expanded by establishing institutional frameworks around digital trade, cross-border data flows, and mutual recognition agreements.
According to the paper, the dynamic nature of the global trade environment necessitates quick policy decisions about new trade alignments.
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