India’s Capital Goods Exports Trail Asian Peers, Highlighting Scope for Manufacturing Growth

Capital goods account for 18% of India’s merchandise exports, compared with a 32% Asian average, according to Morgan Stanley Research

Capital goods exports continue to play a significant role in supporting manufacturing activity, employment generation and trade performance across economies. However, India’s share of capital goods exports in total merchandise shipments remains below several major Asian economies, according to data compiled by Morgan Stanley Research.

Exports of capital goods contribute to broader economic activity by supporting manufacturing output, employment creation and trade expansion. The sector is also associated with higher-value production and can influence a country's position within global value chains.

According to data compiled by Morgan Stanley Research through March 2026, capital goods account for 18 per cent of India’s merchandise exports. This places India below the Asian average of 32 per cent and behind several regional economies.

Among the countries compared, Taiwan recorded the highest share of capital goods exports at 40 per cent of merchandise exports, followed by Thailand at 38 per cent, China at 36 per cent and Japan at 35 per cent.

South Korea reported a share of 30 per cent, while the Philippines and Malaysia recorded 28 per cent and 27 per cent, respectively.

India’s share stood at 18 per cent, ahead of Indonesia, which reported 9 per cent.

The data indicates that India’s capital goods export share is roughly half that of several leading Asian manufacturing economies, including Taiwan, Thailand, China and Japan.

The report also notes that India remains a net importer of capital goods, reflecting the continued importance of imported machinery and equipment in meeting industrial requirements.