The recent disruptions in global trade point to the emergence of a ‘new normal’, where flows of goods are vulnerable to factors such as conflicts, uncertain tariffs, and export restrictions. In this post, Sharmila Kantha examines the trends in India’s exports between 2017 and 2024 and deliberates on how the country can respond to this new normal through regional diversification in terms of its export markets.

Since Donald Trump began his second term as President of the United States in January 2025, unpredictable tariff policies, and policy changes and reversals, have cast a gloom upon world merchandise trade. In its April 2025 Global Trade Outlook and Statistics, the World Trade Organization (WTO) lamented that the volume of merchandise trade was slated to expand at almost 3% in 2025 as per its earlier outlook – but new projections, taking into account the reciprocal tariffs and their temporary suspension, were now placed at a negative 0.2%.

The scenario is likely to be further impacted by fresh conflicts in the Middle East where, as of the date of writing this post, an uncertain truce between Israel and Iran was in place and the heavy-traffic trade route through the Hormuz Straits remained under threat of sudden closure. The recent disruptions in global trade point to the emergence of a ‘new normal’, where flows of goods are vulnerable to continued tumultuous periods featuring unpredictable conflicts in various global theatres, uncertain tariffs, and threats and counterthreats regarding export restrictions on critical inputs such as rare earths and semiconductors. In this post, I examine the trends in India’s exports between 2017 and 2024 and explore how the country can respond to this inevitable new normal through regional diversification.

India’s trade in an uncertain global environment

For many years, India has attempted to leverage exports for faster growth. In 2024-25, it achieved an export value of US$437.5 billion in a turbulent and uncertain global trading environment. According to the WTO’s April outlook, global merchandise exports expanded by 2% in 2024 over the previous year, with the figure for India being 2.62% (Department of Commerce, 2025). However, this came after a drop of 4.8% in 2023, on the back of a decline in world merchandise exports of 1%.

India has been struggling in its attempt to build exports and strengthen export resilience at a time when global value chains are shifting, and multiple shocks appear regularly¹. Amidst these shocks, other countries have been striving to adapt their export structures through strategies such as diversification of markets and source countries, exploring alternative products, and efforts such as on-shoring, near-shoring and friend-shoring. However, India has not adequately incorporated these strategies to reshape its export profile.

India’s key export markets

To begin with, India’s exports have witnessed further concentration rather than diversification. As of 2017, India’s top five export markets were the US, United Arab Emirates (UAE), Hong Kong, China, and Singapore, which together accounted for 38.9% of its total goods exports. By 2024, the Netherlands displaced Hong Kong in the top five markets, largely due to increased purchases of refined fuels from India after the conflict between Russia and Ukraine. Thus, the top five destinations now add up to 39.4% of India’s total exports (Table 1). Similarly, the share of the top 10 destinations has increased slightly rather than being diversified.

Notable among these countries is the increasing share of the US from 15.6% to 18.3%. Given the rising position of the US in India’s trade profile, their present stance of disruptive tariffs for the world and new tariff agreements could adversely impact India’s future exports. While the proposed Bilateral Trade Agreement under negotiation could make Indian goods more competitive in the US market (depending on US trade agreements with other countries), a further increase in the share of the US would be detrimental for the overall stability of India’s exports.  

Table 1. Share of top export markets in India’s total exports (2017 and 2024)

Country	2017	2024
US	15.6%	18.3%
UAE	10.1%	8.5%
Hong Kong	5.1%	1.5%
Netherlands	1.8%	5.6%
China	4.2%	3.6%
Singapore	3.9%	3.4%

Further, India has been slow to take advantage of the substantial rise in global imports to grow its exports. Between 2017 and 2024, world imports surged by an incremental US$6 trillion. Of this, India was able to expand its exports only by about US$146 billion, capturing a mere 2.4% of the growth in the global market. During the following seven years of global trade shifts, India’s share in global exports barely inched up from about 1.7% to 1.8%, while its rank improved from 20^th to 18^th. Notably, only China (and to some extent Vietnam) among the top 25 exporters in 2024 significantly increased their global export share while most other countries yielded their share or retained it at around the same level.

Delving deeper into regions, it is found that India made substantial gains in Africa, supplying 9.8% of the continent’s additional imports of about US$151 billion in this period. Its major exports of mineral fuels, pharmaceutical products, vehicles, cereals, and machinery – which contributed over 57% to India’s overall exports to Africa – all gained market share in Africa’s total imports of these products, an encouraging performance.

Similarly 2025, India made inroads into the US market between 2017 and 2024, with its share in US imports rising from 2.1% to 2.7%. While the US increased its purchases from the world by about US$953 billion, India could capture 4.3% of this demand (or around US$40 billion). With the US being the world’s largest importing nation, India can make this an important market for its exports but must balance its reliance on this destination by concomitantly addressing other markets more forcefully. The 28 member countries of the European Union (EU), India has a low presence – despite the EU being among its most preferred destinations. India contributes just 1.3% of the EU’s total imports (a huge US$7.4 trillion) from the world. During the period under study, the EU demanded additional imports of US$1.8 trillion from the world, while India boosted its exports to the region by just US$42 billion. Its reliance on a free trade agreement with the EU to expand its exports may be somewhat over-optimistic, given that competitor countries are already addressing the market effectively and the EU ratification process could take some time.

India has lost its share in the dynamic ASEAN (Association of Southeast Asian Nations) market, which raised its global imports from US$1.26 trillion to US$1.88 trillion between 2017 and 2024. India’s share fell from 2.2% to 1.9%, and it could capture a bare 1.2% (or US$7 billion) of the growth in the market. A notable portion of ASEAN’s imports could possibly be attributed to an attempt by China to redirect its exports to reach the US, and other markets imposing restrictions on imports from China. Further, ASEAN and India’s manufacturing strengths stand at similar levels, making it challenging for India to develop this market. India gained some market share in ASEAN’s automotives and organic chemicals market, but the brief rise in its exports of gems and jewellery, machinery, and mineral fuels in 2022 dissipated by 2024. As a proximate neighbour and integral part of India’s Act East policy, ASEAN needs greater attention from Indian exporters.

In the Latin America and Caribbean (LAC) region, India’s exports have increased by 44% but still stand at low levels. Its share in LAC imports is confined to 1.6% as of 2024, which is lower than its overall global export share. The region is importing to the tune of US$1.4 trillion and represents a significant conduit to the US market with some local value addition.

Table 2. India’s exports to select regions (2017 and 2024)

Region	2017 (US$ billion)		2024 (US$ billion)		Share of India’s exports in total imports of region (in %)		India’s share in increase in imports of region (in %)
	Imports from world	Imports from India	Imports from world	Imports from India	2017	2024
US	2406.08	50.52	3359.31	91.23	2.1	2.7	4.3
EU28	5637.42	54.03	7489.01	96.49	1.0	1.3	2.3
Africa	503.91*	23.10	655.65	37.92	4.6	5.8	9.8
ASEAN	1257.98	28.27	1875.32	35.60	2.2	1.9	1.2
LAC	988.28*	14.03	1396.38	22.21	1.4	1.6	2.4
World	17800.00	295.86	23987.20	441.70	1.7	1.8	2.4

Notes: (i) All countries of the region did not report; some figures (*) represent mirror data. (ii) Share of India’s exports in total imports is calculated by dividing India’s exports by imports from world in a given year.

Source: Author’s calculations using Intracen data.

Looking ahead

India’s policy structure for boosting exports centres around compensations for added costs and ensuring that taxes do not get exported. Recent policies to promote manufacturing, especially through the Production Linked Incentive scheme, have significantly helped exports, particularly in the electronics sector. Efforts have also been made to provide affordable credit to small exporters, raise credit guarantee, and digitise trade facilitation. A key strategy has been to enter into free trade agreements or negotiations with various partner regions and countries.

In essence, in the current world trade scenario, India needs a much more aggressive export promotion strategy that is regionally stratified and balanced. While the advanced nations are large markets, India cannot afford to dilute its efforts in the Global South, which has also witnessed expanding imports in the last few years. It must monitor data in real-time to spot rising import trends and work systematically towards identifying goods in which it has a comparative advantage and marketing them in designated regions and countries. Despite the travails that global merchandise trade is currently weathering, India, with its rapid growth rate, should be able to leverage exports as a more effective driver of growth driver and build its overall external economic resilience.

The views expressed in this post are solely those of the author and do not necessarily reflect those of the I4I Editorial Board.

Note:

1. All data in this post is taken from International Trade Centre (accessed on 25 June 2025), unless otherwise mentioned.