INDIAN EXPORTS IN THE GLOBAL ECONOMY: TRENDS, CHALLENGES AND EMERGING OPPORTUNITIES

Abstract

This empirical research paper investigates the structural trajectory, macroeconomic determinants, competitiveness bottlenecks, and emerging growth corridors of Indian exports within the global economy across the eleven-year period from FY 2015–16 to FY 2025–26. Utilizing longitudinal secondary datasets compiled from the Directorate General of Commercial Intelligence and Statistics (DGCI&S), the Reserve Bank of India (RBI), the World Trade Organization (WTO), and UNCTAD, this study employs Compound Annual Growth Rate (CAGR) modeling, Balassa’s Revealed Comparative Advantage (RCA) indices, the Herfindahl-Hirschman Index (HHI), and Ordinary Least Squares (OLS) log-linear regression analysis across five empirical tables and five visual figures. Empirical findings demonstrate that India’s combined merchandise and services exports expanded by 107.2% from US$ 416.60 billion in FY 2015–16 to a record of US$ 863.10 billion in FY 2025–26, anchored by a 10.56% CAGR in services exports (reaching US$ 421.32 billion) that cushioned 65.1% of the merchandise trade deficit. Sectoral analysis reveals a shift toward capital- and skill-intensive manufacturing led by electronic goods (22.85% CAGR under Production-Linked Incentive schemes), engineering goods (US$ 119.85 billion), and pharmaceuticals (RCA of 2.14) alongside eroding competitiveness in traditional labor-intensive apparel and gems. While econometric estimates confirm that domestic logistics costs (β = -0.642), Real Effective Exchange Rate appreciation (β = -0.415), and Non-Tariff Measures (β = -0.318) significantly constrain merchandise shipments, newly operationalized Free Trade Agreements with the UAE, Australia, EFTA, Oman, and the UK, combined with Global Capability Centres and cleantech manufacturing, project India’s total exports to reach between US$ 1.32 trillion and US$ 1.54 trillion by FY 2029–30.

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