In response, the Survey emphasised the importance of diversifying export markets in the short term, while focusing on increasing market share in the medium term. For the long term, it suggests that India should position itself as a strategic partner in high-value sectors such as biotechnology and semiconductors, especially through partnerships in advanced fields like space, quantum technologies, and telecommunications.
However, the Economic Survey also warned that a continued rise in trade-restrictive measures could lead to higher costs, deter investment, stifle innovation, and slow global economic growth.
Despite a widening merchandise trade deficit, India’s services trade surplus has balanced the overall trade situation, it said. With services exports placing India as the seventh-largest global exporter in the sector, along with strong remittance inflows, the country’s current account deficit (CAD) remains contained at 1.2% of GDP in Q2 FY25.
Trade performance so far
India’s export performance has been solid, with a 5.57% rise in exports to USD 59.93 billion between April-December 2024, driven by strong demand from the American market. In December alone, exports grew by 8.49%. Imports also saw growth during the same period, rising by 1.91% to USD 33.4 billion, with a notable increase of 9.88% in December. Bilateral trade with the US is on track to grow, with India and the US continuing to expand their trade ties, particularly as tensions between the US and China potentially open up new export opportunities for Indian exporters. The US, currently India’s largest trading partner, accounts for 18% of India’s goods exports, and its policies—such as possible tariffs on Indian products—could significantly affect trade dynamics. In 2018, India retaliated against US tariffs on steel and aluminum by raising duties on 29 US products.
