How is Budget 2025 set to accelerate India’s trade growth

India's ability to maintain a competitive edge in global trade will depend on its investment in emerging technologies
What India’s real estate sector hopes to see in Budget 2025

A new year begins, yet geopolitical disruptions continue to dominate headlines—fuelling global trade volatility and economic uncertainty. In an era defined by technological dominance—January itself saw a major splash in the AI space—major economies are realigning their policies to manage risks while seizing opportunities created by shifting global supply chains. From critical raw materials to high-value finished products, global trade demand is evolving. Amidst this changing landscape, India is steadily strengthening its position to capture a larger share in the global value chain.

While global goods trade slowed to just 2 per cent last year1, India’s non-petroleum exports surged by 7 per cent, driven by strong growth in high-value sectors like, pharmaceuticals, electronics, engineering goods and chemicals.2 What stands out here is India’s rapid growth in electronics exports, which have soared from USD11 billion in FY21 to USD26 billion in the current fiscal.3 This growth has been powered by incentive-driven policies and a more favourable regulatory environment. Additionally, India’s non-traditional sectors, after a period of slow growth, are witnessing an upward trend—textile exports, for instance, grew by 7.6 per cent this fiscal.4

So, as India seeks to expand its trade footprint amidst a global economy increasingly leaning towards protectionist policies, Budget 2025 introduced several strategic measures to boost trade.

Dedicated mission for stronger exports growth

Recognising exports as one of India’s four key growth engines, the government has introduced an Export Promotion Mission, with an allocation of INR2,250 crore.5 This initiative aims to facilitate seamless access to export credit, enhance cross-border factoring support and tackle non-tariff trade barriers in global markets. By addressing structural bottlenecks and long-standing sectoral challenges, this mission is expected to create a more predictable trade landscape for Indian exporters.

Digitising trade to unlock more growth opportunities

To simplify trade processes and improve efficiency, the budget announced the launch of BharatTradeNet—a unified digital platform for trade documentation and financing solution. This platform will compliment the existing Unified Logistics Interface Platform, aligning India’s trade infrastructure with global best practices adopted by trading hubs like Singapore and the EU. By enabling real-time tracking and reducing paperwork, the platform is expected to cut transaction costs, improve ease of doing business and enhance trade transparency. Additionally, the budget has placed a strong emphasis on upgrading India’s logistics infrastructure, from digitised geospatial records to improved air cargo facilities, all aimed at cutting trade costs and making Indian exports more competitive. 

Powering domestic supply chains for global play

Beyond infrastructure, a major focus has been strengthening India’s domestic supply chains. The FM announced plans to incentivise key sectors that align with global demand patterns, ensuring that India supplies quality products in international markets and becomes an integral part of global value chains. This push towards greater self-reliance in high-value manufacturing is expected to create jobs, increase domestic production and expand India’s export potential. 

Duty reforms for a seamless trade ecosystem

To further enhance competitiveness, the budget has also rationalised custom duties on key products, such as electronics, seafood and textiles. By correcting inverted duty structures and lowering input costs, these reforms can help Indian manufacturers scale up their footprint in international markets. 

Sector-specific incentives to strengthen key industries

To enable a more conducive domestic ecosystem, the budget introduced targeted reforms for crucial sectors. Take, for instance, MSMEs, which nearly contribute 45 per cent of our exports—their expansion is essential to sustaining long-term trade growth.6 Recognising this, the government has doubled the credit guarantee cover from INR5 crore to INR10 crore, unlocking an additional INR1.5 lakh crore in credit over the next five years.7 In addition, to further revive and boost traditional, labour-intensive sectors, the government has introduced cluster-based development strategies and a focus product scheme targeting key sectors, such as toys, footwear and textiles.

Enhanced push for innovation and R&D

Looking ahead, India’s ability to maintain a competitive edge in global trade will depend on its investment in emerging technologies. A notable budgetary allocation of INR20,000 crore has been made to strengthen R&D and innovation in partnership with the private sector.8 This is particularly crucial in high-impact areas, such as AI, semiconductors and geospatial technologies, which are reshaping global supply chains. Additionally, this initiative is expected to create new skill development opportunities, preparing India’s young workforce for evolving global demands.

With a strong emphasis on trade infrastructure, digital integration and industry-focused policy measures, Budget 2025 lays a strong foundation for India’s export ambitions. Going ahead, fast-tracking projects, ensuring regulatory efficiency and closely monitoring progress will be essential in realising the full potential of these reforms. By capitalising on its strengths and addressing existing challenges, India can advance its position to achieve its ambitious USD1 trillion merchandise exports target.9
 

A version of this article was carried by The Economic Times Government.com. The same can be read here

Author

Neeraj Bansal

Partner and Head India Global

KPMG in India

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