The slide in India’s exports

India’s exports have witnessed a slide in most sectors, as per latest reports, in view of the current geopolitical situation and the pressure of US tariffs.

- Dhurjati Mukherjee

The fault-lines have widened with the rupee falling to its lowest value while exporters, especially small and medium-sized firms, continue to face sustained pressure. Though the trade pact with the US is close to finalisation and it is expected that the tariffs would be brought down, the position now is far from encouraging.

India’s export oriented policy efforts have not only faced weak global demands but intense competition from Asian peers that have historically exported their way to prosperity, enabling labour shifts out of agriculture. Many of the economies have become preferred destinations for entrepreneurs and firms relocating from China. Mention may be made of relative newcomers like Vietnam which recorded strong export growth during the post pandemic period, when the global economy has been slow. Both Vietnam and China increased their export shares while India slipped.

India’s goods export growth averaged only one percentage point above world GDP during 2014-2024. Though comparisons cannot be made with countries such as Indonesia or Brazil, it is significant to note that even Vietnam tripled its share of world exports from 0.6% to 1.7% during this period, almost equalling India’s 2024 share of 1.8%.