India’s trade performance in Q3 FY25 (October–December 2024) reflected cautious resilience amid geopolitical volatility and shifting global demand, according to the NITI Aayog's quarterly report released on Monday.
Merchandise exports registered a year-on-year growth of 3 percent, reaching $108.7 billion.
The export composition remains stable; aircraft, spacecraft and parts entered the top ten exports surging by over 200 per cent year-on-year due to increased demand from Saudi Arabia, UAE, and the Czech Republic, the report states.
High-tech merchandise exports have gained momentum since 2014, led by electrical machinery and arms/ammunition, growing strongly at 10.6 per cent Compound Annual Growth Rate (CAGR).
“The latest edition of Trade Watch Quarterly, for Q3 of FY 2024-25, provides a timely and data-rich analysis of India’s merchandise and services trade, alongside an in-depth exploration of evolving US trade policies and their implications for India,” said Dr. Arvind Virmani, Member, NITI Aayog while releasing the report.
The services sector continued to demonstrate strength, with exports rising by 17 per cent year-on-year to $102.6 billion and imports increasing by 22.5 per cent to $52.4 billion. This resulted in a services trade surplus of $52.3 billion, offering partial offset to the merchandise imbalance.
Additionally, India ranked as the world’s fifth-largest exporter, with Digitally Delivered Services (DDS) exports more than doubling to $269 billion in 2024, powered by IT services, professional consulting, and R&D outsourcing, strengthening India’s position as a global hub for digital trade.
North America and the European Union regionally continued to account for approximately 40 per cent of total exports.
On the other hand, imports expanded by 6.5 per cent to $187.5 billion, widening the merchandise trade deficit.
The thematic focus of the report is the United States’ evolving trade policy, notably the introduction of the current US tariff regime since April 2025 till July 10, 2025, and its implications for India’s export competitiveness.
The US implemented a baseline 10 per cent tariff on all imports, alongside higher tariffs on specific trading partners such as China, Canada, Mexico, Vietnam, and Thailand.
While India’s average tariff exposure remains moderate, this policy shift presents a unique strategic opportunity for Indian exporters.
The analysis shows India is well-positioned to gain market share in a significant portion of its exports to the US, covering over 61 per cent of trade value in the top 30 HS-2 product categories and 52 per cent in the top 100 HS-4 product categories.
These developments highlight the strategic importance of the US as India’s largest export destination and a key growth corridor.
India must pursue complementary policy measures to capitalise these advantages, including targeted export, deeper integration into global value chains, and a services-focussed trade agreement with the US. Building institutional frameworks around digital trade, cross-border data flows, and mutual recognition agreements can expand India’s services footprint further.
The evolving global trade environment demands an agile policymaking on new trade alignments, the report added.
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