India’s Top 10 Exports And Who Buys Them

With record exports in the first seven months of 2021-22, India is well on course to meet its target of $400 billion in merchandise exports for the year. A brutal second wave of Covid-19 was a severe blow to the manufacturing industry, supply chains, and the overall economy at the beginning of the financial year. However, healthy global demand kept exports from India afloat.

India exported goods worth more than $197 billion in April-September 2021, with monthly exports staying above the $30-billion mark. In July 2021, the figure touched $35.43 billion, the highest ever monthly level. It was a 49.85 percent improvement from July 2020 and 35.05 percent up from July 2019. Preliminary data for October 2021 is another impressive show with merchandise exports at $35.47 billion, 42.33 percent up year-on-year. This is in line with India’s ambitious goal of tripling annual goods exports to $1 trillion by 2025 from current levels of around $300 billion.    

In this piece, we take a look at India’s top 10 exports, its top export destinations, and how Covid-19 has changed the export community.

Top 10 exports of India

Engineering goods – including iron and steel products, industrial machinery, and automobiles – are India’s top export this fiscal. They account for 25 percent of the country’s total merchandise exports. India exported $52.3 billion worth of engineering goods in April-September 2021, up 61.4 percent from $32.4 billion in the same period last year, according to Engineering Export Promotion Council (EEPC) India Chairman Mahesh Desai.  

These are India’s top 10 export commodities:      

1. Engineering goods
2. Petroleum products
3. Gems and jewelry
4. Organic and inorganic chemicals  
5. Drugs and pharmaceuticals
6. Electronic goods
7. Cotton yarn/fabrics/made-ups, handloom products etc
8. Ready-made garments (RMG) of all textiles
9. Marine products
10. Plastic and linoleum

Note: This is the top 10 list for October 2021 and closely resembles lists for previous months, with the top 5 commodities remaining consistent.  

Top 10 countries to which India exports

The United States remains India’s top export partner in 2021-22, followed by China. Bangladesh has leap-frogged into the top five from Number 9 previously, reportedly taking advantage of fewer pandemic-related disruptions in the movement of goods when compared to other export destinations such as the US and Europe. Here are India’s top 10 export partners this year:  

1. USA
2. China
3. United Arab Emirates (UAE)
4. Hong Kong
5. Bangladesh
6. Singapore
7. United Kingdom
8. Germany
9. Nepal
10. Netherlands

Source: Indian Trade Portal  

India’s top 10 exports at a glance

1. Engineering goods: These include industrial machinery and equipment, automobiles and their parts, and products made from iron, steel, and other metals. India’s engineering goods exports crossed the $9-billion mark for a single month for the first time in July 2021 and repeated the feat in the following two months. Demand from traditional markets such as the US, UAE, and China drove the surge. Earnings in April-September 2021 stood at $52.3 billion. Engineering goods were India’s top export in 2020-21 too, earning the country $75.97 billion, a slight dip from $81.02 billion in 2019-20.

2. Petroleum products: These include petrol, diesel, gasoline, naphtha, jet fuel, liquified petroleum gas (LPG), and lubricants. India ranks among the top five exporters of refined petroleum, catering largely to markets like the US, UAE, China, Singapore, and the Netherlands. India is also the second largest refiner in Asia after China. Petroleum products exports were severely impacted by Covid-19 in 2020-21 due to the imposition of lockdowns and mobility restrictions and declined 37.3 percent year-on-year. However, they have made an impressive rebound this year.

3. Gems and jewellery: These include diamonds (rough as well as cut and polished), gold jewellery, coloured gemstones, pearls, non-gold jewellery, and synthetic stones. India is the fifth largest exporter of gems and jewellery with a 5.8 percent share in global exports. Exports of cut and polished diamonds lead this segment, followed by gold jewellery. The US, Hong Kong, UAE, Belgium, and Israel are the top importers. Gems and jewellery make up 14 percent of India’s total merchandise exports. After a disappointing 2020-21, when exports fell 27.5 percent year-on-year, this commodity segment has seen a healthy revival in 2021-22. India exported gems and jewellery worth $18.98 billion in April-September 2021, 136.95 percent up from $8.01 billion in the corresponding period last year and an impressive 5.13 percent growth from the same period in pre-pandemic 2019. Exports of cut and polished diamonds are up 125 percent this year.                

4. Organic and inorganic chemicals: Chemicals containing carbon in their molecular structure are called organic chemicals. They have numerous uses. Some have pharmaceutical and medical applications while others are used in plastic production. Examples of organic chemicals exported by India include acetic acid, acetone, phenol, formaldehyde, and citric acid. Inorganic chemicals are those that don’t contain carbon or its derivatives as principal elements. They are used in the paint, automotive, and paper industries as well as an ingredient in cleaning solutions. Soda ash, liquid chlorine, caustic soda, red phosphorus, and calcium carbide are some of the inorganic chemicals exported by India. The US, China, Brazil, Germany, and UAE are key customers for Indian chemicals.      

5. Drugs and pharmaceuticals: With its large raw material base and skilled workforce, India is the third largest pharmaceutical market by volume. It accounts for 20% of global generic drugs exports, reportedly supplying 40 percent of the generic formulations used in the US. It is also the country with the largest vaccine production capacity. India’s pharma exports – which account for 8 percent of its total merchandise exports – have shown great resilience in the face of economic turmoil, including Covid-19. They registered a growth of 18 percent in 2020-21 and continue to stay strong this year.            

6. Electronic goods: These include mobile phones, accessories and components, laptops and computers, among others. India’s electronic goods exports fetched $11.11 billion in 2020-21, almost the same as the $11.7 billion earned in 2019-20. With global demand rallying this year, exporters are hoping for an even better performance in 2021-22. In fact, the Electronics and Computer Software Export Promotion Council says India has the potential to hit $180 billion in electronic goods exports by 2025 provided it receives long-term policy support from the government.        

7. Cotton yarn/fabrics/made-ups, handloom products, etc: India is the second largest cotton-producing country (China ranks first), growing 23 percent of the world’s cotton. It also has the largest area under cotton cultivation. As such, India’s textile industry is largely cotton-based. Cotton yarn/fabrics/made-ups and handloom products account for 40 percent of India’s total textiles export as of June 2021. Towels, bedsheets and other home linen are some of the most exported Indian cotton made-ups.  China, Bangladesh, and Vietnam are the top three importers of Indian cotton. Despite the difficulties posed by the pandemic, India’s cotton exports rose in volume by 127 percent and in value by 106 percent in April-December 2020 compared to the same period in 2019. Indian cotton and cotton products have a price advantage over those produced in the US, Brazil, and Australia, which increases their export potential.                  

8. Ready-made garments (RMG) of all textiles: India’s RMG industry comprises garments made from natural fibres such as cotton, wool, and silk as well as man-made and synthetic fibres. However, cotton is the predominant raw material used in Indian ready-made apparel. The RMG sector makes up 50 percent of India’s textiles and apparel industry. India is also the fifth largest exporter of RMG in the world (it used to be second till a decade ago). The US, UAE, UK, Germany, and France are the largest importers of Indian RMG by value. Despite being one of India’s top exports and one of its largest job creators, RMG exports have been falling in recent years, primarily due to stiff competition from Bangladesh and Vietnam, which enjoy preferential tariffs in the global market and have lower production costs.      

9. Marine products: India’s main seafood exports are frozen shrimp and frozen fish. The US is the largest importer of Indian marine products, followed by China, the European Union, and Japan. In the past two years, the pandemic has severely tested Indian exporters of marine products. Exports fell 10.88 percent in 2020-21 from the previous financial year as demand went flat. This year too, exports suffered as China suspended seafood imports from India, citing the presence of coronavirus traces in packaging. It also blacklisted six Indian seafood exporters. In September 2021, China started online inspections of marine products at multiple processing-cum-export units in several Indian states. This, coupled with a resurgence in demand in the US and a good shrimp harvest, has given hope to exporters that they will be able to meet the government’s target of $7.8 billion in seafood exports for this financial year.                

10. Plastic and linoleum: Thanks to a large raw material base, India produces and exports a wide range of plastic products such as packaging, sanitary fittings, electrical accessories, sacks/bags, tarpaulins, laminates, and medical equipment. However, India accounts for a mere 1 percent of the global plastics market, which is dominated by China (10 percent). The US and China are the top importers of Indian plastics. India’s plastic and linoleum exports totalled $7.45 billion in 2020-21. They have shown a stronger performance this year, growing by 55 percent in the April-June 2021 period compared to the same period in 2020. The revival is due to initiatives by the Plastics Export Promotion Council to boost exports to Europe, especially France.

Covid-19 and after: State of Indian exports

From an expected slowdown in 2020-21 to a surprising surge in 2021-22, India’s exports have been mostly resilient in the face of Covid-19. How has the pandemic tested and shaped Indian exports? Let’s take a look:

Strong in the face of crisis

• Agricultural exports: Since breaking into the top 10 countries exporting agricultural produce in 2019, India’s farm exports have stayed strong amid the supply chain disruptions brought about by Covid-19. Between April 2021 and September 2021, exports of 37 agricultural and processed products promoted by the Agricultural and Processed Food Products Export Development Authority (APEDA) jumped 18 percent to $10 billion compared to the same period in 2020. Wheat and maize exports recorded an impressive 110 percent growth. Cashew grew by 31.6 percent, meat and dairy and poultry products by more than 20 percent, and rice (basmati and non-basmati) by 12 percent.
• Pharmaceuticals: India exported $24.44 billion worth of pharmaceutical products, including vaccines and generic drugs, in 2020-21 – an 18 percent jump from 2019-20. According to Pharmaceutical Export Promotion Council of India Director-General Ravi Uday Bhaskar, this is the highest growth in eight years. The trend continues with drugs and pharmaceuticals being India’s fifth most exported commodity in 2021-22 so far. In October 2021, India resumed exports of Covid-19 vaccines after a six-month gap, living up to the title of ‘pharmacy of the world’ bestowed on it by humanitarian organisation Médecins Sans Frontières.        

• Textiles: A report by the Confederation of Indian Industry (CII) and global consultancy Kearney predicts an 81 percent jump in India’s textile exports by 2026, taking earnings to $65 billion from $36 billion in 2019. The report bases its findings on the ‘China Plus One’ sentiment, a pandemic-era business strategy that encourages companies to diversify their supply chains into countries such as India and Vietnam instead of relying solely on China. Also citing China Plus One and a strong revival in global demand, ratings agency Crisil predicts a 22 percent revenue increase for exporters of Indian home textiles (bed linen, towels, etc) in 2021-22. It says home textile exports to the US – a major market – grew 42 percent year-on-year in the first six months of 2021 compared with a growth of 15 percent in the corresponding period of 2019. The report furthermore mentions that India’s share in US imports of cotton bed sheets and terry towels has gone up 51 percent in 2021 from 46 percent in 2020 while that of China has gone down from 20 percent to 16 percent in the same period. The two reports are welcome news, considering that the textiles and apparel industry contributes 12 percent to India’s export earnings.  

What needs to change?

• Lack of variation: India continues to depend on primary commodities – goods available from cultivating raw materials without a manufacturing process (products derived from agriculture, fishing, mining, forestry, etc) – to drive its export growth. Take petroleum products, for example. Experts attribute the growth in petroleum exports in 2021-22 to a rise in oil prices and a revival in mobility rather than higher demand. Data from 2020-21 seems to prove this point – petroleum products exports declined 37.3 percent (by $15.4 billion) year-on-year in that financial year as the world reeled under lockdowns and mobility restrictions. Warning against over-dependence on commodities that are sensitive to prices, experts say India would do better to diversify its export basket by including more consumer-led commodities, such as manufactured and value-added goods.  
• Missing competitive drive: India saw its merchandise exports ranking among 15 developing countries slip to Number 8 in 2020 from Number 7 in 2018. Its share of exported goods fell from 3.9 percent to 3.6 percent during that period. Rival China took the top spot and South Korea came in at second. In a year (2020) marred by huge supply chain disruptions and economic distress, only China, Vietnam, and Chinese Taipei saw exports grow among the 15 countries. In the only bit of good news, India took second spot for its services exports, up a spot from 2018.