While the US, the EU & the Gulf region remain major markets for India, exporters are increasingly reaching new markets with a wider range of products. Greater use of FTAs and stronger participation in global value chains can make India’s exports less vulnerable to shocks in any product or region, writes Ajay Sahai
l How India has diversified exports
INDIAN EXPORTS HAVE undergone a noticeable structural transformation. Overall exports of merchandise and services increased from about $498 billion in 2020-21 to $863 billion in 2025-26. This expansion is no longer dependent only on traditional products such as gems and jewellery, textiles or agricultural commodities. Engineering goods, electronics, pharmaceuticals, chemicals, petroleum and digitally delivered services have emerged as important growth drivers. Non-petroleum merchandise exports reached $388 billion in 2025-26, indicating that the underlying export basket has become broader and more resilient.
l Rapid rise of electronics exports
ELECTRONIC GOODS EXPORTS rose from $6.26 billion in 2014-15 to $47.7 billion in 2025-26, raising their share in merchandise exports from 2.02% to 10.8%. Engineering goods accounted for over 26% of our exports in 2025-26. These trends show India gradually moving towards technology-intensive, skill-intensive and higher-value products. Mobile phones have played a leading role, but the basket is gradually extending to electronic components, telecom equipment, consumer electronics and industrial products. The large domestic market has given manufacturers the scale required to build globally competitive facilities; improvements in logistics, digital customs procedures and the supplier ecosystem have supported exports.
l Going beyond its traditional markets
THE US, THE European Union and the Gulf region remain major markets, but exporters are increasingly reaching Australia, Africa, Latin America, Central Asia and smaller European economies. The European Union’s share in Indian exports rose to 19% in 2025-26 with exports reaching $86 billion. Within Europe, exports have expanded not only to Germany and the Netherlands but also to France, Italy, the Czech Republic and other markets. This suggests deeper penetration within regions rather than dependence on one or two large destinations.
l Importance of the African market
INDIA’S EXPORTS TO West Africa rose from $6.98 billion in 2014-15 to $13.65 billion in 2025-26. Togo, Côte d’Ivoire, Benin, Ghana and Guinea have emerged as significant destinations; exports to the Southern African Customs Union reached $7.99 billion. Demand is being driven by pharmaceuticals, automobiles, two-wheelers, machinery, rice, electrical equipment and development-related goods.
l Role of services in this expansion
SERVICES HAVE BECOME the strongest pillar of diversification at $421 billion in 2025-26. While software and IT services remain dominant, consulting, finance, accounting, research and development, engineering design, education, health-care, etc., increasingly have a higher share. Remote delivery has enabled even smaller Indian firms to serve clients across North America, Europe, Asia-Pacific, Africa and the Middle East.
l What’s behind the market spread?
GREATER MANUFACTURING CAPACITY, digitalisation, improved infrastructure, export finance, market intelligence, more active commercial diplomacy and the pursuit of free trade agreements (FTA) have all helped. Supply-chain disruptions encouraged global buyers to adopt “China-plus-one” sourcing, while India’s reliability during the pandemic built its reputation in pharmaceuticals, food products and essential goods. Exporters are ready to explore non-traditional markets, and meet higher standards relating to quality, traceability and sustainability.
l How this growth can be sustained
INDIA MUST NOW convert diversification into durable global market share. This needs lower logistics and finance costs, better product quality, stronger domestic component ecosystems and meeting environmental and technical standards. Export promotion should focus on both technology-intensive products and employment-intensive sectors. Greater use of FTAs, district-level export development, overseas warehousing and stronger participation in global value chains can make export growth less vulnerable to shocks in any single product or geography.
l Role of new-age FTAs in this shift
INDIA’S STRATEGY OF negotiating trade deals—such as CEPAs and ECTAs with the UAE, Australia, EFTA nations, Oman and the UK—has unlocked broader market access. These deals address non-tariff barriers, trade facilitation, service integration, and investment guarantees. Preferential access in these markets has helped labour-intensive sectors like textiles, leather, gems and jewellery and specialised engineering goods.
The writer is CEO and director general of the Federation of Indian Export Organisations
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.