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India’s exports grow amid global challenges: Economic Survey 2024-25
Industry News- Jan 31,25
India’s share in global services exports doubles from 1.9% in 2005 to 4.3% in 2023.
India’s external sector remains resilient despite global trade uncertainties, with total exports (merchandise and services) growing by 6% in the first nine months of FY 2024-25, according to the Economic Survey 2024-25. Excluding petroleum, gems, and jewellery, export growth stood at 10.4%, reflecting India's competitiveness in manufacturing, agriculture, and services. Imports also grew by 6.9% during this period.
Expanding services exports
India’s share in global services exports has more than doubled from 1.9% in 2005 to 4.3% in 2023, with the country ranking as the second-largest exporter in ‘Telecommunications, Computer, & Information Services’ (10.2% market share) and third-largest in ‘Other Business Services’ (7.2%). E-commerce exports also show significant growth potential.
Free trade agreements & export strategy
The survey emphasises the need for a strategic trade roadmap, highlighting ongoing FTA negotiations, including deals with the EU and the UK. The UAE-India CEPA has already boosted textile exports, and India is focusing on diversifying its export basket and expanding into new markets.
Foreign direct investment trends
Gross FDI inflows rose 17.9% year-on-year to $55.6 billion in the first eight months of FY25, with India crossing $1 trillion in cumulative FDI since 2000. The services sector remained the largest recipient (19.1%), followed by computer software & hardware (14.1%) and non-conventional energy (7%). Despite short-term global volatility, India’s economic fundamentals and deep capital markets continue to attract investors.
Foreign exchange reserves & external debt
India’s foreign exchange reserves stood at $640.3 billion as of December 2024, covering nearly 90% of the country’s $711.8 billion external debt. The external debt-to-GDP ratio increased slightly to 19.4% by September 2024, while its ratio to forex reserves declined, reflecting stability in India’s external sector.
Current account deficit & investment climate
With India’s investment needs surpassing domestic savings, the Survey underscores the importance of attracting foreign capital through improved investment efficiency and ease of doing business. It also notes mixed trends in foreign portfolio investments, with withdrawals due to global uncertainties but renewed interest driven by India’s strong macroeconomic fundamentals.
(PIB.GOV)
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