In today’s interconnected world, finding the right market for your products is crucial for sustained growth and success.  

India—with its vibrant economy, vast manufacturing capabilities, and a young, tech-savvy workforce—is emerging as an ideal hub for export-oriented businesses. As the country steadily picks up pace on the global trade track, it offers a unique blend of advantages: from cost-effective production to a wide range of sectors ripe for export. 

Being an already established name in the global export of commodities like coffee, tea, spices and gemstones, it has in the last decade moved ahead also in manufacturing and been at the forefront of manufacturing exports with its Make in India initiative. In FY 2023-24, the country recorded $776.68 billion in merchandise and services exports.

Having a 7,516-km-long coastline ably supported by 229 ports, India is poised to become a leading destination for businesses looking to tap into international markets, especially at a time when government incentives, strategic trade agreements and a focus on boosting exports have amplified the import-export conditions. 

“Additionally, the average turnaround time for the major ports has come down to 48.06 hours in 2023-24 from 93.59 hours in 2013-14, marking a difference of 48.65%. Among major steps taken to improve this were the construction of new berths, terminals and parking plazas at ports; mechanisation, modernisation and optimization of existing berths and terminals, streamlining of processes through digitalisation, expansion of hinterland connectivity through rail and road,” says Karan Sethi, Vice President, Infrastructure at Invest India. 

Government incentives propelling export-oriented businesses in India 

In its efforts to enhance exports, the Government of India follows a three-pronged approach: 

• Promotion and strengthening of manufacturing within the nation  
• Simplification of the export process for ease of doing business 
• Liberalisation and reformation of the trade policies to boost global trade 

The Production-Linked Incentive (PLI) Scheme, launched in 2020, would be a prime example of the government’s efforts towards diversifying and accelerating the nation’s domestic manufacturing capabilities. A dedicated focus on high-value export commodities like electronics, telecommunications equipment, processed foods, pharmaceuticals and automobiles, the scheme has a dedicated outlay of $26 Bn to enhance the nation’s export and manufacturing potential.  

Under the scheme, while exports of goods reported ₹3.20 lakh crore, over 6.78 lakh employment have reportedly been generated, thereby presenting a potential picture of the nation’s move on its way ahead.  

Another key government initiative that is playing a transformative role is the Foreign Trade Policy 2023-28. It is a policy document based on the continuity of time-tasted schemes facilitating exports. As a policy document, it is nimble and responsive to trade requirements and based on trust and partnership with exporters.

Ease of business for exports in India 

An integral impetus of the momentum that Indian exports have had in recent years has been the strides taken to simplify the process of exporting goods and the efforts made to enhance market access for Indian manufacturers.  

The Interest Equalisation Scheme (IES), for example, launched in 2015, offers exporters a subsidy on interest paid on pre- and post-shipment export credit, with interest rates ranging from 3% to 5%. Exporters receive credit from banks at reduced interest rates, with the government subsequently repaying the difference. Moreover, MSME exporters of all goods, as well as exporters of the 416 enlisted products under the scheme, can avail the scheme. The IES was most recently extended to August 2024 with an additional allocation of ₹2,500 crore.

Meanwhile, the Market Access Initiative (MAI) scheme, introduced in 2018, has supported MSMEs and businesses towards export promotion efforts in newly discovered markets, thereby acting as a catalyst for export growth. In terms of market access initiatives, including marketing, market research, promotion and branding in new countries, this scheme aims to provide financial support while handling the costs associated with legislative and regulatory compliance in the nation importing the goods. 

Benefits for exporters in India 

In recognition of the fact that liberalisation of export is as much about reforms to trade policy as it is to democratic access to raw materials and compliance support, the Government of India, under the Advance Authorisation Scheme (AAS) permits the duty-free import of raw materials needed to make export goods.  

If businesses intend to import raw materials to produce export goods, they can import such resources with zero import duty. Moreover, the 2019 amendment of the Foreign Trade Policy saw the Duty Free Import Authorisation (DFIA) Scheme allowing the exemption of duty on the import of raw materials, effective once the export process of the goods manufactured from the materials is completed. 

Furthermore, exporters with a “Letter of Undertaking (LUT)” bond can export goods exempt from GST. Exporters who pay IGST (Integrated GST) on their goods can export them and claim a refund that purchase export goods from domestic vendors can avail a concessional 0.1% GST rate.

Sectors that offer the best export opportunities in India 

India is actively working towards moving away from traditional exports such as iron ore and agricultural commodities. In FY 2023-24, the main drivers of merchandise export growth included electronic goods, drugs & pharmaceuticals, engineering goods, iron ore, cotton yarn/fabs/made-ups, handloom products and ceramic products & glassware. 

Petroleum products account for the lion’s share (18.8%) of India’s overall exports, valued at $20,709.41 million during April–June 2024-25. Industries like biological and drug formulations (5.2%) and telecom instruments (4.78%) displayed positive growth. Meanwhile, the states with the highest percentage of exports were Tamil Nadu (10.78%), Maharashtra (14.66%) and Gujarat (30.18%).  

While the US is the leading export destination for India’s smartphone and telecom exports, the Netherlands is the dominant market for exporting petroleum and automotive fuel from India.  

If stats are looked into, India has already emerged as a dominant player in the global export market, showcasing remarkable growth across various sectors. In the agrochemical sector, India has achieved notable success, particularly in insecticides, rodenticides and fungicides. By 2023, exports reached $4.32 billion, marking a global market share of 10.85%, up from 5.89% in 2014. The electronics manufacturing sector has shown significant advancements, reflected in the exports of electrical transformers and related components, which grew from $1.08 billion in 2014 to $2.85 billion in 2023.

Additionally, India has made remarkable strides in rubber pneumatic tyre exports, which reached $2.66 billion in 2023. Its global market share rose to 3.31%, securing the 8th position, a notable leap from 14th in 2014.

Impact of foreign trade policy on export businesses in India 

The latest iteration of India’s Foreign Trade Policy (FTP), effective since April 01, 2023, places a strong emphasis on cross-border e-commerce exports and aims to support grassroots efforts to increase exports and the settlement of trade in the Indian Rupee.  
 
Various measures have been undertaken to encourage and support exports, including the application fees for Medium-Sized and Micro-Enterprise (MSME) exporters for Advance Authorisation (AA) that is being lowered. Also, the online approval process for a variety of permissions required by exporters has been reduced to a day. The government has streamlined the electronic Certificate of Origin (COO) and the filing process for applications to discharge export obligations to ease compliance burden and encourage exports. Together, with the Districts as Export Hubs (DEH) initiative to encourage exports at the district level and accelerate the growth of the grassroots trade ecosystem. 

Another crucial component of India’s gameplan to boost exports includes Free Trade Agreements (FTAs) with several leading economies of the world. It is an agreement between two or more countries or trading blocs that agree to reduce or eliminate customs tariffs and non-tariff barriers on substantial trade between them. 

India currently has 14 FTAs, including one with four-nation European bloc and six preferential pacts with its trading partners. Since 2014, India has signed FTAs with Mauritious, the UAE, Sri Lanka, Bhutan, Thailand, Australia and the 10-nation bloc ASEAN (Association of Southeast Asian Nations). The latest addition to the list is the agreement with European Free Trade Association (EFTA), members of which are Iceland, Liechtenstein, Norway and Switzerland.  

There are other agreements which are called Preferrential Trade Agreements (PTAs) and Comprehensive Economic Cooperation Agreement (CECA) and Comprehensive Economic Partnership Agreement (CEPA). India has CEPA with Japan, Korea, UAE and CECA with Singapore and Malaysia. The country is negotiating FTAs with the UK, Oman and the European Union currently.  

Government support to boost exports 

Apart from these initiatives and policy intervention, there are several other initiatives which are also boosting exports and promoting Make in India to the world. Among the advantageous adjuncts to the amendments of the FTP, the RoDTEP (Remission of Duties and Taxes on Exported Products) Scheme was added in August 2021. With a budget outlay of ₹15,070 crore and a further allocation of 10% in FY 2024-25, the scheme aims to encourage exports by remitting taxes and levies paid on goods.  

The Star Export House Certificate, conferred by the Directorate General of Foreign Trade (DGFT), offers its holders privileges that include remission of general tariffs for the export of goods up to ₹10 lakh or 2% of their average yearly exports. Expedited customs clearance, exemption from mandatory bank guarantee provision for various export promotion schemes and more.

The Niryat Rin Vikas Yojana (NIRVIK) Scheme of 2020-21offers small and medium-sized exporters financial support with low premiums, insurance coverage and a streamlined claim settlement procedure. Functioning as an insurance cover guarantee programme for exporters, it covers up to 90% of the principal and interest. 

Since the last decade, India has been witnessing a surge in manufacturing and export activity across multiple industries, including electronics, automobiles, textiles and pharmaceuticals, due to the expansion and diversification of grassroots businesses. Advantageous reforms in place, quick assimilation of digital solutions, expansion of manufacturing hubs and infrastructural support are among India’s export capabilities that are defining its path way ahead on the the global stage.