How strategic reforms and innovation can drive India’s export growth

In brief

• India’s exports hit a record high in FY23 and remained strong in FY24, driven by services growth and market diversification.
• The Union Budget 2025 positions exports as the fourth growth engine, with key initiatives aiming for US$2 trillion exports by 2030.
• Strategic reforms in trade finance, cross-border factoring, and capacity building will boost MSMEs and enhance global competitiveness.

India’s external trade trajectory has demonstrated steady growth and has displayed resilience amidst global economic and trade policy uncertainties. Exports, after hitting a record high in FY23, have sustained momentum backed by strong growth in services exports and consistent focus to diversify in new markets. In the first nine months of FY25, exports have reached US$602.6 billion and imports have reached US$682.2 billion, demonstrating a y-o-y growth of 6% and 6.9%, respectively. Imports have increased on the back of strong domestic demand. Overall Trade continues to be in a deficit.

Challenges facing India’s export ecosystem

While India’s exports have grown at 6% y-o-y, there are still issues that are pertinent and need to be addressed. These issues pan across the trade ecosystem including but not limited to: a) difficulties in availing traditional trade finance products, b) credit access to exporters due to limited data to assess creditworthiness and availability of collaterals, c) regulatory bottlenecks d) legal framework to support digitization of trade documents and e) availability of one-stop shop experience for all needs of exporters cutting across various ecosystem participants. 

Strategic reforms for exports growth

A comprehensive export growth strategy is essential for India’s trade transformation, involving policy reforms to ease trade with emerging markets and to provide financial support to MSME exporters. Digital trade finance solutions backed supported by a centralized data platform and improved data interoperability will enhance goods tracking, compliance, and risk management. The adoption of alternate financial products, such as cross-border factoring, supported by tailored underwriting models, alongside a robust legal framework for digitizing trade documents, will re-imagine the way exporters avail credit. Integration with India Stack and government incentives for technology adoption will further expand credit access and promote digital solutions across the export ecosystem. It will also be imperative to focus on capacity building initiatives to support the entire export ecosystem.

Exports as the fourth engine of growth

The Union Budget 2025 underscores the critical importance of exports as the fourth engine of growth and the Government has reaffirmed its commitment to India’s export aspiration through Export Promotion Mission, Bharat Trade Net (BTN) and Domestic Manufacturing Support. Exports Promotion Mission coupled with the National Manufacturing Mission will provide a phenomenal platform to MSME exporters to do business at a global stage.

As the latest addition to Digital Public Infrastructure (DPI) under India Stack 2.0, Bharat Trade Net (BTN) will digitize International Trade through integration of Customs, DGFT, GSTN, Banks and Exporters. It will complement Unified Logistics Interface Platform (ULIP) and operate alongside OCEN, ONDC, UPI and other DPI components to create a truly paperless ecosystem, thereby transforming the way Indian businesses undertake global trade.