India has doubled its contribution to global trade over the last two decades, marking a significant rise in its share of global exports and imports, according to a report by the National Stock Exchange (NSE). However, the pace of growth has moderated in the past decade due to global economic challenges.
The report reveals that India’s share in global merchandise exports increased from 0.9 percent in 2005 to 1.8 percent in 2023, while its share in services exports more than doubled from 2 percent to 4.3 percent. Overall, the country’s export share rose from 1.2 percent in 2005 to 2.4 percent in 2023, driven by factors like improved trade agreements, government initiatives such as Make in India, the Production-Linked Incentive (PLI) scheme, and diversification of export portfolios.
In services exports, India ranks seventh globally, a testament to its strong performance in this sector, which accounts for 43.8 percent of India’s total exports—significantly higher than the global average of 24.7 percent. This dominance reflects India’s comparative advantage in IT, financial, and consulting services.
India’s import share has also seen substantial growth. The report notes that merchandise imports increased from 1.3 percent in 2005 to 2.8 percent in 2023, while services imports grew from 2.4 percent to 3.4 percent. Collectively, India’s share in global imports rose from 1.5 percent to 2.9 percent over the same period.
India’s export growth was particularly robust in the first two decades following economic liberalization, with a compound annual growth rate (CAGR) of 11.1 percent between FY94 and FY04, and 17.3 percent from FY04 to FY14. However, the last decade (FY14-FY24) witnessed a slowdown, with export growth declining to a CAGR of 3.3 percent due to subdued global demand, rising trade protectionism, and disruptions like the COVID-19 pandemic and geopolitical tensions.
Despite the slowdown, services exports demonstrated resilience, maintaining a higher CAGR of 8.4 percent during the last decade, reflecting India’s competitive edge in the global services sector.
The report also highlights India’s Relative Comparative Advantage (RCA) in sectors like agriculture, textiles, chemicals, and pharmaceuticals, while identifying gaps in machinery, transport equipment, and electronics—areas with potential for future development.
The analysis sheds light on global trade dynamics over the past two decades. While India made significant gains, China’s share in global merchandise exports surged, largely at the expense of traditional export leaders like Japan, Germany, France, the UK, and the USA. In the services sector, India and Singapore expanded their shares, while the USA saw a decline.
(Inputs from ANI)
