• The US accounted for 18% of India's total exports in FY24, reaching a value of $77.5 billion.
• The top five items exported to the US in FY24 were drugs and pharmaceuticals, pearls and precious stones, petrochemical products, telecom equipment, and readymade garments.
• The government aims to reach $2 trillion in exports of goods and services by 2030, with industries like carpets, electronic products, yarn, and marine products showing significant export potential.
• The future of India's export economy looks promising, with a clear strategic focus on diversification and growth.

India's export economy has seen a significant shift in recent years, with the United States emerging as a dominant player. A recent report by the Bank of Baroda revealed that the US accounted for 18% of India's total exports in the financial year 2024. This figure represents a steady growth in India's exports to the US, with the value reaching $77.5 billion in FY24. Over the last 30 years, India's exports to the US have been growing at a compound annual growth rate (CAGR) of 10.3%.

The growth rate of exports to the US was higher than the total export growth rate until FY2000. However, following the financial crisis of 2008, this growth slowed down until FY10. Since then, the growth rate of exports to the US has surpassed the total export growth rate, indicating the importance of the US market for India.

The US share in India's total exports was 18% in FY24, up from 16.4% in FY92. Despite this growth, it is still below the highest level of 22.8% recorded in FY00.

Key Industries and Diversification

The report advised India to reduce its over-dependence on one country for exports and focus on diversifying its export markets. The US market remains crucial for many key Indian industries. The top five items exported to the US in FY24 were drugs and pharmaceuticals, pearls and precious stones, petrochemical products, telecom equipment, and readymade garments. These items accounted for 40% of the country's total exports.

Other significant exports include yarn, marine products, and electronic goods, with electronic goods exports facing competition from other Asian countries. From 2000 to 2022, India's goods export increased from $48.5 billion to $467.5 billion, while industrial exports grew from $39.6 billion to $317.4 billion.

The government aims to reach $2 trillion in exports of goods and services by 2030. In addition to the primary source information, several other relevant news sources provided further context. For instance, industries like carpets, electronic products, yarn, and marine products also show significant export potential, despite their relatively smaller overall export volumes.

Global Economic Landscape and Future Projections

This strategic advice comes amid evolving global political and economic landscapes, emphasizing the importance of maintaining a flexible and adaptive export strategy. After dipping to a low of 10.1% in FY11 following the financial crisis, the US share has rebounded steadily over the years. This trend indicates the resilience and adaptability of the Indian export market in the face of global economic challenges.

Interestingly, the diversification of manufacturing away from heavy reliance on Chinese manufacturing was also noted. Apple, for example, has been assembling smartphones in India through contract manufacturers since 2017. This shift in manufacturing strategy is indicative of the growing importance of India as a manufacturing hub for global companies.