Composition of India's exports

Detail

What "composition of exports" means

• Composition of exports means the mix of goods and services a country sells abroad. It is usually shown as the share by value (per cent of total export earnings) of each group.
• Merchandise exports are physical goods (for example, diamonds, rice, machines). Services exports are work sold abroad without a physical product (for example, software, IT-enabled services, business consulting, tourism).
• A change in composition shows a change in the economy:
• Colonial trade: India mostly exported raw materials and farm goods, and imported finished factory goods.
• After independence, and faster after the 1991 liberalisation: manufactured and value-added goods took over. Value-added means raw material that has been processed into something worth more.
• Present day: high-technology goods (electronics) and services are growing fastest.

Share of major groups (Table 8.2, share by value)

Group	2015-16	2021-22	Trend
Manufactured goods	72.9%	67.8%	Largest share, but falling
Crude and petroleum products	11.9%	16.4%	Rising
Agriculture and allied products	12.6%	11.9%	Slight fall
Ores and minerals	1.6%	2.0%	Small, stable

• Manufactured goods still make up about two-thirds of exports, so India's export basket is mainly industrial.
• The petroleum share rose in 2021-22 mostly because world oil prices were high. It does not mean India has more crude oil of its own.

Manufactured goods: the main group

• Engineering goods are machines, vehicles and auto parts, iron and steel products, ships, electrical equipment and similar metal-based goods.
• This group grew fast after liberalisation.
• Main rivals: China and the East Asian economies (South Korea, Taiwan, the ASEAN countries), which make similar goods cheaply and in very large amounts.

• 2024-25: engineering goods exports rose 6.74%, from US$ 109.3 billion (2023-24) to US$ 116.67 billion. That is about 27% of total merchandise exports of US$ 437.42 billion [2].

• Gems and jewellery are a big share of exports.

• Rough diamonds are imported. They are cut and polished at Surat (Gujarat, on the Tapi river near the Gulf of Khambhat). They are then traded and re-exported through Mumbai (Maharashtra).

• This is a re-export pattern: India adds value through skilled labour, not through its own mines.

• Chemicals, drugs and pharmaceuticals: Class 10 NCERT lists chemicals along with gems and jewellery and farm goods as key exports.

• 2024-25: engineering goods, electronic goods, and drugs and pharmaceuticals were named the top three sectors behind India's export growth [3].

Crude and petroleum products

• India imports most of its crude oil. It refines the crude and exports refined petroleum products such as diesel, petrol and aviation fuel.
• How it works: crude arrives by tanker at a coastal refinery → it is refined into fuels → the fuels are shipped out from the same coast.
• Jamnagar (Gujarat, on the Gulf of Kachchh, about 22°N) has some of the world's largest refining capacity and is the leading export refinery hub.

• Because refineries sit on the coast, they save on transport costs in both directions.

• 2024-25: petroleum products exports grew 6.95% [2].

• 2025-26: merchandise exports were US$ 441.78 billion and non-petroleum exports were US$ 387.88 billion [4]. So petroleum products came to about US$ 54 billion, roughly 12% of merchandise exports. This is below the 16.4% share of 2021-22 because oil prices fell.

Agriculture and allied products

• Traditional items fell. Cashew, and to some extent tea, coffee and spices, lost share because world competition grew tough. Vietnam, for example, competes in cashew.
• New items rose:
• Floriculture: growing flowers for sale.
• Fresh fruits and vegetables.
• Marine products: fish and shrimp, mostly from the coastal states.

• Sugar.

• Rice: India is the world's largest rice exporter.

• 2024-25: rice exports were worth US$ 12.95 billion [7].
• India is the largest exporter of Basmati rice, a long-grain, scented rice from the Indo-Gangetic plains of Punjab, Haryana and western Uttar Pradesh [8].

Ores and minerals

• Ores and minerals are only about 2% of exports (2021-22).
• Reason: India now uses more of its iron ore and other minerals in its own steel and metal plants. It exports finished steel (an engineering or manufactured good) instead of raw ore.

Electronics: the fastest-growing item

• The PLI scheme (Production Linked Incentive) gives companies cash rewards linked to how much extra they make in India. It aims to make India a global manufacturing hub.
• The PLI scheme for Large Scale Electronics Manufacturing has drawn about ₹96,000 crore of investment into mobile phone making [6].
• Mobile phone exports grew 127 times, from ₹1,500 crore (2014-15) to ₹2,00,000 crore (2024-25) [6].
• In Q2 2025 (April to June), India overtook China as the top smartphone exporter to the United States [6].
• Electronic goods exports grew 32.47% in 2024-25 [2].
• Main clusters: Noida (Uttar Pradesh), Sriperumbudur near Chennai (Tamil Nadu), and Bengaluru and the Hosur belt (Karnataka and Tamil Nadu).

Services: the "software giant"

• Class 10 NCERT calls India a "software giant". IT services earn a large amount of foreign exchange (money in foreign currencies such as the US dollar, which India needs to pay for imports).
• Services exports have almost caught up with merchandise exports:

Year	Merchandise exports	Services exports	Total exports
2024-25	about US$ 437.7 billion	US$ 387.5 billion (+13.6%)	US$ 825.25 billion (record) [3]
2025-26	US$ 441.78 billion (+0.93%)	US$ 418.31 billion (+7.94%)	US$ 860.09 billion (+4.22%) [4]

• 2025-26: services were about 49% of all exports. Services grew more than eight times as fast as goods.
• RBI data put total exports for FY 2025-26 at a record US$ 863.1 billion [5].

Where exports come from (geographical link)

• Export clusters sit on top of the main industrial regions and close to ports:
• Gujarat: Surat (diamonds), Jamnagar (refined petroleum), and Ahmedabad and Vadodara (chemicals and pharmaceuticals). These ship through Kandla (Deendayal), Mundra and Sikka.
• Mumbai and Pune belt: engineering goods, pharmaceuticals and gem trading. These ship through JNPA (Nhava Sheva).
• Chennai, Bengaluru and Coimbatore: automobiles, electronics, software and garments (Tiruppur).
• Hyderabad: bulk drugs and IT services.

• Coastal Kerala, Andhra Pradesh and Gujarat: marine products. Kerala (Kollam) also processes cashew.

• Being close to a port lowers freight cost and transit time. This is why most export industries are found in the western and southern coastal states.

Prelims Hooks

• Table 8.2 order by share, highest to lowest (2021-22): manufactured goods (67.8%) > crude and petroleum products (16.4%) > agriculture and allied (11.9%) > ores and minerals (2.0%).
• Trap: the petroleum share rose (11.9% → 16.4%) while the manufactured goods share fell (72.9% → 67.8%) between 2015-16 and 2021-22.
• Diamond cutting and polishing: Surat (Gujarat, Tapi river). Diamond trading: Mumbai.
• Jamnagar (Gulf of Kachchh, Gujarat) is the leading coastal refinery for exporting refined petroleum products.
• Traditional export that declined under competition: cashew. Rising farm exports: floriculture, fresh fruits, marine products, sugar.
• Largest single sector of merchandise exports: engineering goods, US$ 116.67 billion in 2024-25 [2].
• Top three export-growth sectors in 2024-25: engineering goods, electronic goods, drugs and pharmaceuticals [3].
• Mobile phone exports rose about 127 times between 2014-15 and 2024-25, mainly because of the PLI scheme [6].
• Services exports in 2025-26: US$ 418.31 billion, close to merchandise exports of US$ 441.78 billion [4].
• India is the world's largest rice exporter and the largest exporter of Basmati rice [8].

Mains Points

• From primary goods to value-added goods:
• Colonial India sold raw materials and bought finished goods.
• After 1991, manufactured goods (two-thirds of exports) and services led instead.
• Today electronics under PLI is the fastest-growing item.

• This shows the economy shifting away from farming towards industry and services (GS-III).

• Weak points in the export mix:

• Import dependence: gems and petroleum exports rely on imported rough diamonds and crude oil, so they add value but leave a narrow margin and are hit hard when world prices change.
• Competition: engineering goods and garments face strong rivals in China, Vietnam and Bangladesh.

• Farm exports: farm exports depend on the monsoon and on export bans. Cashew shows how a traditional item can lose its market.

• Spatial pattern:

• Exports are concentrated in Gujarat, Maharashtra, Tamil Nadu and Karnataka, near ports and industrial regions.
• The interior and eastern states lag.

• Policy responses: dedicated freight corridors, Sagarmala port-led development and a "District as Export Hub" approach to spread export gains.

• Services as a shock absorber:

• Services exports (US$ 418.31 billion in 2025-26) grew faster than goods [4].
• They help cover the merchandise trade deficit (when imports cost more than exports earn).
• They depend on skilled human capital in cities such as Bengaluru, Hyderabad, Pune and Chennai.