External Sector

Recent developments in the external sector are as follows:

• India's engineering goods exports reached a record high of Rs. 9,89,480 crore (US$ 116.67 billion) in the FY25, marking a 6.74% increase from FY24. The United States emerged as the leading destination for these exports.
• India holds a 3.9% share of the global textiles and apparel trade. During the period April to October of FY25, Ready-Made Garments (RMG) accounted for the largest portion of exports, totalling Rs. 75,488 crore (US$ 8,733) million and representing 41% of the overall exports, which amounted to Rs. 1,84,619 crore (US$ 21,358 million).
• Taiwanese firms are increasingly moving their supply chains from China to India amid escalating global trade tensions, bolstering economic ties between Taipei and New Delhi. Chairman of the Taiwan External Trade Development Council, Mr. James Huang, highlighted a surge in Taiwan's foreign direct investment (FDI) in India, reaching over US$ 665 million in the 5 years leading up to 2023, compared to nearly US$ 277 million invested from 2006 to 2017.
• In July 2024, Union Minister of Commerce and Industry, Mr. Piyush Goyal, engaged in discussions with EU and UK counterparts during the G7 Trade Ministers' Meeting in Italy, focusing on deepening economic ties and exploring free trade agreements. These talks were highlighted as crucial for enhancing global trade relations and economic cooperation, showcasing India's proactive approach to fostering stronger economic partnerships globally.
• India and the European Free Trade Association (EFTA) signed a Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. The TEPA, approved by the Union Cabinet, aims to enhance trade and economic collaboration between India and EFTA countries, including Switzerland, Iceland, Norway, and Liechtenstein. The FTA will provide a window to Indian exporters to access large European markets.
• On March 22, 2024, the Prime Ministers of India and Bhutan convened to assess their bilateral energy cooperation, expressing contentment with existing joint projects that are bolstering Bhutan's economic progress. They anticipate the inauguration of the 1020 MW Punatsangchhu-II Hydro-electric Project this year, building on the success of the Mangdechhu Hydro-electric Project. Discussions on the 1200 MW Punatsangchhu-I HEP have been fruitful, aiming for a technically robust and cost-effective approach.
• On February 21, 2024, the Union Cabinet, chaired by Prime Minister Mr. Narendra Modi, approved amendments to the Foreign Direct Investment (FDI) policy on the space sector, allowing 100% FDI and liberalized entry routes for various activities such as satellite manufacturing, launch vehicles, and spaceports. These reforms aim to attract investors, boost private sector participation, create employment opportunities, and promote self-reliance in line with the Indian Space Policy 2023.
• In January 2024, the Union Cabinet approved the proposal for the signing of a protocol to establish a Joint Economic and Trade Committee (JETCO) between India and the Dominican Republic, signifying the strengthening of bilateral relations, between the two nations. The establishment of JETCO will bolster economic ties and serve as a platform for discussions, information exchange, and collaboration between India and the Dominican Republic and is also expected to open doors to broader markets in Latin America and the Caribbean.
• On January 16, 2024, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Mr. Piyush Goyal, chaired the second meeting of the reconstituted Board of Trade in New Delhi. He announced the initiation of the Trade Connect ePlatform, facilitating connections between Indian exporters and international trade stakeholders.
• In January 2024, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Mr. Piyush Goyal, aspired to elevate India-UAE bilateral trade to US$ 100 Billion. Speaking at the 'UAE India Business Summit' during the 10th Vibrant Gujarat Global Summit, he underscored the broad collaboration areas between the two nations, including space exploration, security, education, and climate action.
• In December 2023, India and Oman held second round of discussion on bilateral trade and investment relations. The leaders expressed satisfaction at the pace of ongoing negotiations for signing an India-Oman Comprehensive Economic Partnership Agreement (CEPA)
• In November 2023, The Commerce Ministry announced that it is partnering with e-commerce companies to boost exports from districts through the "Districts as Export Hubs" initiative. This collaborative effort aims to empower MSMEs by leveraging e-commerce platforms. The Directorate General of Foreign Trade (DGFT) has signed a Memorandum of Understanding (MoU) with Amazon, focusing on capacity building for MSMEs in specific districts. This strategic collaboration seeks to enhance the export capabilities of MSMEs in identified areas through the facilitation and support of e-commerce platforms.
• On October 9, 2023, the Commerce Ministry announced that the export status certificate will now be issued based on the available electronic data and traders will not have to apply to get the recognition.
• In September 2023, it was announced that, under the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Corporation (BIMSTEC), India will be annually exporting eggs worth Rs. 350 crore (US$ 42.1 million) to Sri Lanka’s State Trading Corporation to help the island nation tide over the crisis.
• On September 11, 2023, it was notified that India and Saudi Arabia have begun discussions on settling their trade in local currencies.
• In September 2023, India agreed to bring down the import duty to 5-10% on some fresh and processed food items as part of a larger dispute settlement between New Delhi and Washington at the World Trade Organization (WTO). 
• In August 2023, Minister of Commerce and Industry, Mr. Piyush Goyal and US Trade Representative Ms. Katherine Tai discussed ways to promote trade and investments between the two countries.
• As notified in August 2023, India’s toy exports increased by 60% from US$ 203.46 million in 2018-19 to US$ 325.72 million in 2022-23.
• On July 25, 2023, the 8th Foreign Office Consultations between India and Brunei were held in Bandar Seri Begawan. The two sides reviewed their bilateral relations and discussed ways to strengthen cooperation including in trade, commerce, investments, defence, and space. 
• As reported in July 2023, Germany's Vice Chancellor and Minister of Economic Affairs and Climate Action Mr. Robert Habeck highlighted that India and Germany want to further strengthen bilateral cooperation and increase investments and collaboration among companies.
• The government, on July 17, 2023, simplified norms for exporters to avail benefits of an advance authorization scheme under which free imports of input materials are allowed. The eligibility of inputs is determined by sector-specific norms committees based on input-output norms.
• India and Indonesia were working on a real-time payment mechanism and trading in local currencies, the two countries announced. The two countries launched an Economic and Financial Dialogue that will focus on enhancing bilateral trade and investment, financial services, and infrastructure development, among others.
• In July 2023, Finance Minister Ms. Nirmala Sitharaman and Canadian Deputy Prime Minister Ms. Chrystia Freeland discussed the progress being made on ongoing bilateral trade negotiations between the two countries.
• As reported in June 2023, India and Israel were planning a slew of initiatives to bolster their cooperation in agriculture. The two countries are planning to push high-level agricultural technology cooperation between Israeli institutions and the Indian Council of Agricultural Research (ICAR). 
• The Sharjah Chamber of Commerce and Industry (SCCI) successfully concluded its trade mission to India in June 2023, after five days of fruitful meetings and discussions with Indian business and industrial associations in New Delhi and Mumbai. The trade mission, organized by the Sharjah Exports Development Centre, visited the Indian Capital and commercial hub to discuss potential investment advantages and lucrative opportunities to further strengthen bilateral ties.
• Mango exports to the US from India witnessed unprecedented success in 2023 and are expected to double this year. The presence of a substantial Indian diaspora, numbering 4.7 million strong, has been the primary driving force behind the surge in demand for Indian mango varieties in the North American country.
• On May 29, 2023, India and Singapore agreed to create opportunities for lifelong learning, building a future-ready workforce, and making knowledge and skill development a key pillar of strategic partnership.
• The government on May 24, 2023, allowed the exports of broken rice based on permission given by the government for shipments to other countries to meet their food security needs, although the export of broken rice is banned in general.
• In May 2023, Prime Minister Mr. Narendra Modi and his British counterpart Mr. Rishi Sunak reviewed the progress of the ongoing free trade agreement (FTA) negotiations and agreed for their trade teams to continue at pace towards an "ambitious" deal.
• Exports of engineering goods to Russia jumped eleven times in April 2023 to US$ 133.6 million as compared to the year-ago month.
• To boost ties between India and Egypt, the Academy of Scientific Research and Technology (ASRT), - an Egyptian council of planning just like NITI Ayog in India, has appointed Dr. Abdul Rehman Ilyas as an advisor to the President of ASRT thereby promoting and propagating the bilateral relationship in different spheres between the two nations.
• The Netherlands emerged as India's third largest export destination after the US and UAE during 2022-23, according to the commerce ministry's data. India's exports to the Netherlands rose by about 48% to US$ 18.52 billion during 2022-23 as against US$ 12.5 billion in 2021-22.
• India became Europe’s largest supplier of refined fuels in April 2023.
• Electronics export from India became the sixth largest export commodity segment surpassing the readymade garment basket, according to a government estimate for selected major commodities.
• On April 25, 2023, the Indian Apex exporters body- the Federation of Indian Export Organizations (FIEO) announced that it signed a memorandum of understanding (MoU) with Business Russia to promote trade and investments between the two countries. The two organizations will cooperate to arrange exhibitions, buyers-sellers meetings, workshops, and seminars, and encourage enterprises to work in tandem with their counterparts for joint ventures.
• On April 12, 2023, India and Italy discussed the progress of talks on the proposed free trade agreement between New Delhi and the EU and hope for its early conclusion.
• In March 2023, the Government approved the export of 3.5 lakh tonnes (LT) of broken rice to Gambia and Senegal, as earlier, in September 2022, the broken rice shipments were banned.
• In March 2023, India, and the European Union (EU) concluded the fourth round of talks for a comprehensive free trade agreement (FTA) in Brussels.
• In March 2023, India announced wheat assistance of 20,000 million tonnes (MT) to Afghanistan in partnership with the United Nations World Food Programme (UNWFP) through Iran’s Chabahar Port.
• In February 2023, India and Iraq discussed ways to further increase and diversify the trade from oil to non-oil sectors to have an economic partnership and technology engagement.
• As reported in February 2023, India, Brazil, and the US, as leading biofuel producers and consumers, will work together during the next few months towards setting up a global biofuel alliance along with other interested countries.
• As of January 2023, the UAE was in early discussions with India to trade non-oil commodities in Indian rupees. The UAE’s trade deal with India aims to increase bilateral non-oil trade to US$ 100 billion in the next five years.
• As reported in January 2023, India’s two recently signed Free Trade Agreements (FTAs) with the UAE and Australia resulted in strong double-digit growth in exports to these countries. After the operationalization of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), the gems and jewellery industry witnessed a 25% growth in exports to the UAE.