India’s Export Trends: A Mixed Bag of Growth and Decline in 2024/25

India’s export sector has shown a dynamic yet uneven performance in the first eight months of the fiscal year 2024/25, according to the latest provisional data released by the Ministry of Commerce. The total exports for this period reached Rs. 158,172.4 million, marking a significant 57.2% increase compared to Rs. 100,617.4 million in the same period of 2023/24. However, a closer look at the data reveals a complex picture, with some commodities experiencing robust growth while others face sharp declines. This article delves into the details of India’s top 20 export commodities, highlighting key trends, winners, and challenges in the global market.

Overall Export Performance

The total exports for the first eight months of 2024/25 (April to November) reflect a strong recovery, growing by 57.2% compared to the same period in 2023/24. This growth is a stark contrast to the annual figures of 2023/24, which saw a slight decline to Rs. 152,380.6 million from Rs. 157,140.7 million in 2022/23. The top 20 commodities, which account for 72% of total exports in 2024/25, surged by 72.7%, reaching Rs. 113,891.1 million. Meanwhile, other exports (outside the top 20) grew by 27.8%, contributing Rs. 44,281.3 million. Notably, electricity and aviation fuel exports, which are not included in the top 20, saw declines, with electricity exports dropping to Rs. 10,456 million from Rs. 13,013.7 million, and aviation fuel exports increasing slightly to Rs. 9,936 million from Rs. 8,328.1 million.

Top Performers: Soybean Oil Dominates, Tea Surges

Soybean oil emerged as the leading export commodity, contributing 30.3% of total exports in 2024/25 with a value of Rs. 4,794.69 million for the eight-month period. However, this figure represents a significant decline from Rs. 8,372.26 million in 2022/23, reflecting volatility in global demand and pricing. The commodity saw a dramatic drop to Rs. 754.14 million in 2023/24, likely due to supply chain disruptions or shifts in international markets, before recovering partially in 2024/25. The absence of a percent change figure for soybean oil in the data suggests that its fluctuations may be under further review, but its dominant share underscores its critical role in India’s export basket.

Tea exports, on the other hand, recorded the highest growth rate among the top 20 commodities, surging by 40.6% to Rs. 3,459.96 million in 2024/25 from Rs. 2,452.91 million in 2023/24. This growth aligns with global trends of increasing demand for Indian tea, particularly in markets like the Middle East and Europe, where premium varieties such as Darjeeling and Assam are gaining popularity. The annual export value for tea in 2023/24 was Rs. 3,611.64 million, indicating that the eight-month figure for 2024/25 is on track to surpass last year’s performance.

Other notable performers include polyester yarn and thread, which grew by 21.9% to Rs. 8,715.79 million, and particle board, which saw a 19.1% increase to Rs. 5,881.95 million. These commodities, contributing 5.5% and 3.7% to total exports respectively, reflect India’s growing strength in textile and wood-based industries, driven by competitive pricing and improved manufacturing capabilities.

Declining Sectors: Palm Oil and Readymade Garments Struggle

Not all sectors shared in the export boom. Palm oil exports plummeted by 64.6%, dropping to Rs. 1,640.32 million in 2024/25 from Rs. 4,633.02 million in 2023/24. This sharp decline follows a peak of Rs. 15,181.90 million in 2022/23, suggesting a significant contraction in demand, possibly due to global oversupply, price volatility, or shifts toward alternative oils like soybean oil. India, traditionally a major importer of palm oil, may also be facing challenges in re-exporting processed palm oil products, impacting its trade balance in this category.

Readymade garments, a key segment of India’s textile industry, also faced headwinds, declining by 11.3% to Rs. 3,760.82 million in 2024/25 from Rs. 4,246.76 million in 2023/24. This drop is concerning, as the sector has historically been a significant employer and contributor to export earnings. The annual figure for 2023/24 was Rs. 6,294.50 million, indicating that the eight-month performance in 2024/25 is lagging behind. Factors such as rising production costs, competition from countries like Bangladesh and Vietnam, and changing consumer preferences in Western markets may be contributing to this decline.

Zinc sheet exports also saw a notable decrease of 19.9%, falling to Rs. 6,380.16 million from Rs. 7,974.92 million. This decline follows a peak in 2023/24, where annual exports reached Rs. 11,858.05 million, suggesting that global demand for zinc products, often used in construction and manufacturing, may be softening amid economic slowdowns in key markets.

Mixed Trends in Traditional Exports

Traditional exports like cardamom and pashmina showed modest growth. Cardamom exports increased by 12.8% to Rs. 5,837.37 million, reflecting steady demand for Indian spices in international markets. Pashmina, a luxury product, grew by 4.4% to Rs. 2,112.45 million, indicating sustained interest in high-value handicrafts despite global economic uncertainties.

However, herbs exports declined by 24.4% to Rs. 1,022.21 million, possibly due to competition from other herb-producing countries or challenges in meeting stringent quality standards in markets like the EU. Similarly, juice exports dropped by 7.7% to Rs. 4,881.33 million, despite an annual peak of Rs. 8,658.69 million in 2023/24, hinting at potential oversaturation or shifts in consumer preferences toward fresh or alternative beverages.

Emerging Sectors: Rosin and Shoes Gain Traction

Rosin, a resin used in industries like adhesives and paints, saw an impressive 62.6% increase, rising to Rs. 1,302.86 million from Rs. 800.50 million. This growth highlights India’s expanding role in niche industrial products, catering to global manufacturing needs. Similarly, shoes and sandals exports grew by 33.5% to Rs. 1,129.95 million, reflecting India’s growing competitiveness in the footwear industry, which benefits from low labor costs and improving design capabilities.

Interpretation and Economic Implications

The data reveals a polarized export landscape. On one hand, the overall 57.2% growth in total exports signals a robust recovery, likely driven by improved global demand, better trade logistics, and India’s strategic focus on diversifying its export markets. The strong performance of commodities like tea, polyester yarn, and particle board underscores India’s competitive edge in agriculture, textiles, and manufacturing. The surge in rosin and shoes exports also points to emerging opportunities in niche and value-added sectors.

On the other hand, the sharp declines in palm oil, readymade garments, and zinc sheet exports highlight vulnerabilities. These sectors may be grappling with external factors such as global price fluctuations, competition, and changing trade policies, as well as internal challenges like rising input costs and supply chain bottlenecks. The volatility in soybean oil exports, despite its dominant share, raises questions about the sustainability of relying heavily on a single commodity.

The modest growth in traditional exports like cardamom and pashmina suggests that while these sectors remain stable, they may need innovation and marketing to capture larger market shares. Meanwhile, the decline in electricity and aviation fuel exports indicates potential challenges in the energy sector, possibly due to domestic demand pressures or shifts in global energy markets.

Looking Ahead

India’s export sector is at a crossroads. To sustain the current growth momentum, policymakers and industry leaders must address the challenges faced by declining sectors like readymade garments and palm oil. This could involve incentives for modernization, better market access through trade agreements, and investments in quality and branding. At the same time, the government should capitalize on the success of high-growth sectors like tea and rosin by promoting value addition and exploring new markets.

The 72% share of the top 20 commodities in total exports also highlights the need for diversification. Over-reliance on a few products makes the economy vulnerable to global shocks, as seen with soybean oil and palm oil. Expanding the export basket to include more technology-driven and high-value products could provide a buffer against such risks.

In conclusion, while India’s export performance in 2024/25 reflects resilience and opportunity, it also underscores the need for strategic interventions to ensure balanced and sustainable growth. As global trade dynamics continue to evolve, India must adapt swiftly to maintain its position as a competitive player in the international market.