India’s Exports Face Global Pressure — But Trade Deals Could Be the Lifeline
India’s exports are feeling the heat. According to the RBI’s latest report, global geopolitical tensions, protectionist policies, and tightening financial conditions are weighing down outbound trade. But there’s a silver lining — strategic trade agreements may help Indian exporters stay afloat.
Let’s break down the key findings from the RBI and what they mean for Indian businesses.
RBI Report: Key Geopolitical Risks for Indian Exporters
The RBI’s Annual Report 2024–25, released on May 30, 2025, outlines the major challenges facing India’s export sector:
- Geopolitical conflicts: The Russia-Ukraine war and Red Sea tensions have disrupted shipping lanes and raised insurance costs.
- Global slowdown: Weak demand from major markets like the US and Europe is reducing orders.
- Commodity volatility: Prices of key exports like crude, steel, and agro-products remain unstable.
- Rupee depreciation risk: Currency swings can add uncertainty for exporters already operating on thin margins.
- Trade barriers: New tariffs and import restrictions from developed nations are hurting sectors like textiles and electronics.
Trade Agreements: India’s Strategic Response
To mitigate these shocks, India is actively leveraging bilateral and regional trade agreements.
Key Developments:
| Trade Deal / Region | Status & Impact on India |
|---|---|
| India-UAE CEPA | Already operational; boosted non-oil exports by 11% |
| India-Australia ECTA | Tariff elimination on 85% of Indian exports |
| India-UK FTA | Under final negotiation; focus on textiles, pharma |
| India-EU Talks | Ongoing; expected to benefit auto and green tech |
| IMEC Project | India-Middle East-Europe Corridor to ease logistics |
Expert View:
“Trade pacts aren’t just paperwork — they’re a buffer against volatile geopolitics. Smart exporters should align their product and market strategy with active FTAs,” says Anil Mehta, ex-DGFT consultant.
Which Sectors Are at Risk — and Which Stand to Gain?
Vulnerable Sectors:
- Textiles & Apparel – Facing tough competition from Bangladesh and Vietnam
- Engineering Goods – Hit by weak EU demand
- Pharma Generics – Facing regulatory scrutiny abroad
Sectors With Potential Upside:
- Gems & Jewellery – Strong UAE demand via CEPA
- Agro-exports – Supported by MEA market access
- Green Energy Components – Likely boost under India-EU corridor
RBI’s Recommendations for Export Resilience
- Diversify export markets to reduce reliance on the US/EU
- Strengthen compliance with destination country regulations
- Invest in logistics and warehousing to counter global disruptions
- Use export credit insurance to mitigate payment risks
- Leverage FTAs for tariff and non-tariff advantage
Government Support Measures
Under FTP 2023 and Budget 2024–25, the government announced:
- ₹13,000 crore under Export Promotion Capital Goods (EPCG) scheme
- Simplified RoDTEP refunds
- Districts as Export Hubs (DEH) initiative to boost MSME exports
👉 Read our detailed blog on DEH & MSME support
Summary
India’s exports face global headwinds from war, inflation, and trade barriers. But RBI highlights how FTAs like CEPA and ECTA could help Indian exporters navigate the storm.
FAQs
Q1: Is the India-UK Free Trade Agreement finalised?
Not yet. It’s in the final stages of negotiation as of May 2025.
Q2: Which Indian exports are rising despite global slowdown?
Agro-exports, electronics, and jewellery are seeing moderate gains, especially in UAE and ASEAN markets.
Q3: How do trade agreements help small exporters?
They reduce tariffs, open new markets, and often include simplified customs processes.
Final Word
While global politics remain turbulent, India’s calibrated trade strategy offers exporters a way to stay competitive. Businesses must track FTA updates, comply with global norms, and diversify wisely.