Agri-trade mixed bag

NAYEAR marked by shifting tariffs by the Trump administration and global geopolitical tensions, India's trade performance faces many challenges.

- ASHOK GULATI RITIKA JUNEJA

While the India-UK free trade agreement (FTA) has been concluded, the bilateral trade agreement (BTA) with the US is still under negotiation. Meanwhile, it would be interesting to review and reflect on India's FY25 trade performance.

India's total exports, comprising goods and services, rose to $820.93 billion in FY25, marking a 6.5% increase over FY24. Merchandise accounted for $437.42 billion (53%), while services, powered by India's global edge in IT, finance, and business solutions, contributed $383.51 billion (47%). Imports, however, grew faster at 6.85%, reaching $915.19 billion. Merchandise made up the lion's share (79%) of imports with $720.24 billion, while services added $194.95 billion (21%). This pushed the trade deficit to $94.26 billion, from $78.39 billion in FY24. With the International Monetary Fund pegging India's nominal GDP at $4.19 trillion in FY25, the trade-to-GDP ratio stands at a robust 41.4%—reflecting deeper ties with global markets.

In the case of agriculture, which employs over 46% of India's workforce, exports inched up to $52 billion in FY25 from $48.9 billion in FY24, registering a modest 6.3% increase. While this is a welcome trend, it's still far from the $100-billion target set for 2030. Compare this with the performance between FY05 and FY14, when agri-exports grew by an average 20% annually, leaping from $8.7 billion to $43.3 billion. The last decade, in contrast, has been sluggish. From FY15 to FY25, average annual growth collapsed to just 2.3%. As a result, India's agri-trade surplus shrank from $27.7 billion in FY14 to just $13.8 billion in FY25.