India’s export outlook brightens as market share grows in key sectors, says RBI report

A positive outlook for India’s exports

India’s export performance is showing signs of improvement, with the country steadily increasing its share in global trade across a range of manufacturing sectors, according to the Reserve Bank of India’s (RBI) November bulletin.

Despite a subdued growth outlook over the past few months, India has made notable strides in key export categories, positioning itself as a more competitive player in the global market.

The report highlights that India now holds a significant 13% share of the global petroleum product market, reflecting its growing refining capabilities and the country’s ability to meet international standards. This marks a key achievement for India’s manufacturing sector, particularly in petroleum.

India’s prominence in other export categories is also on the rise. The country is now the largest exporter of precious and semi-precious stones, the third-largest exporter of insecticides, the eighth-largest exporter of rubber pneumatic tyres, and the ninth-largest exporter of semiconductors.

The RBI report also notes impressive performances in specific sectors. For instance, Apple has exported nearly $6 billion worth of India-made iPhones in the first half of the fiscal year 2024-25, underscoring the country’s growing role in global electronics manufacturing. Additionally, India’s automobile exports surged by 14.3%, driven by increased demand for passenger vehicles and two-wheelers.

In terms of agricultural products, India has seen growing exports of a wide range of items, and export restrictions on several goods have been lifted, further boosting India’s export potential. Efforts are also underway to expand the number of geographical indication (GI) products, which are expected to help secure premium pricing in global markets. Currently, more than 1,100 GI products are registered under the One-District-One-Product (ODOP) scheme, with 640 of them already being exported.

India is also focusing on improving its trade agreements, particularly with Free Trade Agreement (FTA) partners.

The RBI report points out the urgency of standardizing approaches to negotiating FTAs, particularly in addressing issues like rules of origin and non-tariff barriers, which could help India access broader markets.

Over the last five years, India’s imports from FTA partners have increased by 37.9%, while exports grew at a slower rate of 14.5%. The report suggests that enhancing market access through strategic FTAs is key to capitalizing on the ‘China plus one’ trend in global manufacturing, which is seeing companies diversify their supply chains away from China.

India is also undergoing a significant transformation in its maritime trade logistics, which is crucial as maritime trade accounts for 95% of India’s trade by volume and 65% by value. The country has made substantial improvements in port capacity and efficiency. Over the past decade, India’s port capacity has more than doubled, from 745 million tonnes to over 1,600 million tonnes.

Traffic at major ports has risen by nearly 50%, and the average turnaround time for ships has significantly reduced—from 127 hours in 2010 to just 53 hours today. Notably, Jawaharlal Nehru Port Trust (JNPT) at Nhava Sheva has an even more impressive turnaround time of just 21 hours.

These improvements have contributed to India’s rise in the World Bank’s Logistics Performance Index, where the country’s rank has improved from 54th in 2010 to 38th in more recent assessments, indicating a clear upward trajectory in India’s logistics capabilities.

Overall, the RBI’s November report paints a promising picture for India’s export sector. As India continues to expand its share in key global markets, improve its logistics infrastructure, and engage in strategic FTAs, the outlook for the country’s exports is increasingly positive.

With continued efforts to enhance trade partnerships, support high-value sectors, and reduce trade barriers, India is positioning itself as a key player in global trade for the years ahead.

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