India has experienced a notable transformation in its export baskets, shifting from labour-intensive products like textiles to capital- and skill-intensive ones such as engineering goods and jewellery, according to a recent essay by economists in the finance ministry. The study reveals that India added a staggering 628 new products to its export basket by 2022, with nearly one-third consisting of high-value engineering goods, petroleum products, and chemicals.
Over the span of three decades, India not only entered new markets but also emerged as a market leader in various product categories. For instance, India has become the top exporter of shipping vessels, commanding almost 33% of the market share. Additionally, it has also gained prominence as a leading exporter of iron and steel alloys, a market that was largely unexplored before 1994.
The growth of these new products has surpassed that of the existing ones, with notable increases seen in sectors such as helicopters, arms and ammunition, and electrical machinery. Interestingly, the study highlights that India’s increasing share in world exports can be attributed to its growing traction in new markets, particularly in developing countries.
During the post-reform period, India’s exports have consistently outpaced the growth rate of world exports, indicating a broad-based and sustainable growth pattern. Despite global supply chain disruptions, India’s goods and services exports have doubled to a remarkable $770 billion in two years ending in 2022. This upsurge can be attributed to several favourable factors, including trade diversion favouring Indian products, rising global commodity prices, and a strong rebound in global trade.
Indian trade experts believe that this shift in export baskets reflects the changing income levels in developing countries, which have become increasingly important destinations for Indian products. With such robust growth and diversification, India is poised to consolidate its position as a global export powerhouse.
