Finance Minister Nirmala Sitharaman’s budget planning just got harder. 'Make in India' woes has seen India’s manufacturing exports actually declining last month by 1 per cent, down to just $38 billion. This, even as China surpassed an unprecedented one trillion dollars in exports last year.
Ironically, electronics goods exports (Thank you Apple suppliers!) increased 35 per cent, from 2.65 billion to 3.58 billion in December 2024. However, that wasn’t enough to take Indian exports to positive territory.
The saving grace for Indian exports continue to be services export, which increased by around one billion dollars, from 31.63 to 32.66. However, there are warning bells even here, with services imports increase higher — from 15.63 billion to 17.50 billion.
This has seen India’s negative trade balance balloon, from 2.76 per cent in December 2023 to nearly 7 per cent last month.
The figures saw Federation of Indian Export Organisations (FIEO) president Ashwani Kumar call for enhanced support in the upcoming budget through a PLI scheme to boost manufacturing capacity and include labour-intensive sectors.
Industry experts point out volatility in commodity and metal prices, international trade disruptions, especially tensions in the Middle East as well as currency fluctuations for this. Export flow to key markets like Europe, Africa, and the former Soviet republics were affected due to these factors.
Looking ahead, Kumar of FIEO stressed the importance of a focused export strategy targeting key markets, particularly the US, as the likely tariff war between the US and China after Trump assumes office presents new opportunities. He also called for the continuation of the Interest Equalisation Scheme, R&D support, the establishment of a globally recognised Indian shipping line, and resolution of GST-related export challenges in the upcoming Budget to ensure sustained growth.