Outlook for India’s Export Growth in FY25: FIEO Projections

The Federation of Indian Export Organisations (FIEO) forecasts India’s merchandise exports to reach $500-510 billion in FY25, rebounding from a 3% contraction in the previous fiscal year. Services exports are estimated to contribute $390-400 billion, culminating in total exports of approximately $890-910 billion. Noteworthy sectors driving this growth include engineering, advertising services, and the expansion of global capability centers.

Sectoral Insights

Key drivers of export expansion include traditional markets like the United States and Europe, alongside robust demand for technology-driven sectors such as electronics, machinery, pharmaceuticals, and medical equipment. Labor-intensive industries like apparel, footwear, and gems & jewelry are anticipated to rebound after experiencing double-digit declines in the previous fiscal year.

Credit Challenges

FIEO highlights challenges in accessing credit due to inflation, high commodity prices, and delays in export proceeds remittance. Longer voyage times and slow offtake from shelves contribute to extended credit periods. FIEO suggests a sub-target for export credit within the existing priority sector lending framework, akin to the sub-target for MSMEs, to address the declining trend in credit to exporters and facilitate export-led growth.

Piyush Shukla

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