PM Modi and Global Trade: Navigating India’s Stance in a Changing World

Published: August 06, 2025 | Last Updated: August 06, 2025

News Overview

India’s international trade relationships and diplomatic positioning have become focal points in discussions about geopolitical realignment and economic strategy during 2025. Recent trade disputes involving tariff announcements, strategic partnerships with multiple nations, and economic policy adjustments have generated significant attention regarding India’s approach to global commerce and diplomatic engagement.

Key developments include trade tensions with certain trading partners, continued engagement with multiple regional and international organizations, and policy measures aimed at domestic economic adjustment. India’s trade with various nations continues to evolve within the context of broader global economic conditions and geopolitical considerations.

The Indian government has pursued multiple trade partnerships and maintained engagement with diverse international partners. These developments reflect India’s approach to managing complex international economic relationships while pursuing domestic economic objectives.

Section 1: Current Trade Environment and Key Developments

Global Trade Context

India operates within a rapidly changing global trade environment characterized by shifting partnerships, emerging supply chain challenges, and evolving tariff structures. The world economy continues adjusting to technological changes, regional manufacturing developments, and changing consumption patterns.

International trade volumes have experienced fluctuations related to various geopolitical events and economic conditions. Many nations have implemented tariff measures or trade restrictions affecting specific sectors or trading partners. These global conditions create both challenges and opportunities for trading nations.

India’s Trade Volume and Growth Trajectory

India’s merchandise trade reached approximately $1.47 trillion in 2025, representing significant growth compared to earlier periods. The nation ranks among the world’s ten largest trading economies by current measures.

These figures reflect India’s economic growth trajectory and increased participation in global commerce. The expansion of trade activity indicates stronger integration into international supply chains and commercial networks.

Section 2: India’s Major Trading Partnerships

Russia-India Trade Relationship

Trade between India and Russia reached approximately $68.7 billion in the 2024-25 financial year. This represents a substantial relationship encompassing energy, defense, and other sectors. India’s imports from Russia comprised approximately $64 billion, while Indian exports reached around $5 billion.

Energy represents the primary component of India-Russia trade, reflecting India’s energy security strategy and purchasing decisions. Defense cooperation and fertilizer trade constitute additional significant components of the bilateral relationship.

The energy sector dominates India-Russia trade, reflecting India’s significant crude oil imports from Russia. Defense purchases support military modernization programs. Fertilizer imports contribute to agricultural productivity.

United States-India Trade Relationship

India-US bilateral trade volume reached approximately $190 billion in 2024. The United States maintains a goods trade deficit with India estimated at $45.7 billion, representing a 5.1% increase compared to 2023.

Trade between the two nations encompasses technology services, pharmaceuticals, agricultural products, and manufactured goods. The US pharmaceutical market imports significant quantities of medications and active pharmaceutical ingredients from India. Information technology services represent another substantial component of India-US commerce.

Recent developments included tariff announcements affecting certain Indian goods. These trade measures addressed specific product categories and reflected broader trade policy considerations. India’s government responded with various policy adjustments and diplomatic communications.

China-India Trade Dynamics

India-China bilateral trade maintained significant volume despite ongoing political and security tensions. Trade between the nations continued despite periodic disputes and security incidents. China remains one of India’s largest trading partners in terms of merchandise imports.

India imported significant quantities of electronic components, machinery, and other manufactured goods from China. Exports from India to China included minerals, chemicals, and agricultural products. This trade relationship continued despite diplomatic complications.

Diversified Trading Partners

India maintains substantial trade relationships with numerous other nations including Japan, Germany, Singapore, South Korea, and Gulf nations. These diversified partnerships reduce dependency on any single trading partner and support economic resilience.

Trade agreements and regional cooperation frameworks including BIMSTEC, ASEAN, and others structure India’s engagement with neighboring and regional economies. These mechanisms facilitate commerce and economic cooperation across multiple sectors.

Section 3: India’s Strategic Economic Policies

Atmanirbhar Bharat Initiative

India’s self-reliance initiative emphasized reducing import dependency while building domestic manufacturing capacity. The program targeted various sectors including defense production, pharmaceuticals, electronics, and agricultural equipment. Policy measures included production-linked incentives, reduced tariffs on certain inputs, and government procurement preferences for domestic manufacturers.

The initiative sought to develop indigenous capabilities in sectors traditionally dependent on imports. Defense manufacturing represents a particular focus area, with targets for increased domestic production and reduced military equipment imports. Similar approaches applied to pharmaceutical ingredients, semiconductor production, and renewable energy equipment.

Manufacturing Sector Development

India’s manufacturing sector expanded as a share of gross domestic product, with growth targeting 20-25% contribution by 2030. Government programs promoted investment in manufacturing, particularly for export-oriented production. Infrastructure development focused on industrial parks and manufacturing clusters.

Foreign direct investment in manufacturing increased during this period, reflecting investor confidence in India’s manufacturing prospects. Sectors attracting particular investment attention included electronics, automobiles, pharmaceuticals, and renewable energy equipment.

Agricultural Trade and Food Security

India’s agricultural exports reached $52.4 billion during 2024-25, reflecting strong global demand for Indian agricultural products. Rice, wheat, sugar, and spices constituted major export categories. Agricultural policies emphasized farmer welfare, productivity improvement, and export competitiveness.

Government programs including direct farmer income support, agricultural market infrastructure development, and farmer producer organization promotion aimed to enhance agricultural productivity and commercialization. Agricultural export growth supported rural economic development and farmer income generation.

Section 4: Energy Trade and Energy Security Strategy

Oil and Energy Imports

India imports crude oil and petroleum products from multiple sources to support domestic energy requirements. Russia emerged as a significant source of crude oil imports during 2025. Saudi Arabia, Iraq, and other nations continue supplying petroleum to India.

Energy security considerations influence India’s import strategy and trading relationships. Long-term supply contracts with various nations provide stability for energy supplies. Strategic petroleum reserves support energy independence during supply disruptions.

Renewable Energy Capacity Development

India’s renewable energy capacity expanded substantially, with installed solar and wind capacity reaching approximately 190 gigawatts by 2025. Government targets aimed for continued renewable capacity growth to achieve energy transition objectives.

The International Solar Alliance, coordinated from India, engaged numerous member nations in renewable energy cooperation and technology sharing. The initiative aimed to promote solar energy adoption globally and support technology transfer to developing nations.

Renewable energy development reduces import dependency for energy while supporting climate change mitigation objectives.

Section 5: Defense Production and Military Modernization

Defense Manufacturing Achievements

India’s defense production sector valued at approximately $13.8 billion in 2024 demonstrated significant growth. Defense exports increased 334% since 2014, reflecting expanded manufacturing capabilities and international competitiveness.

Major defense production achievements included development of various weapon systems, fighter aircraft components, missile production, and naval vessel construction. Government policies promoting defense manufacturing through production-linked incentives and infrastructure development supported industry growth.

Defense Import Reduction

India’s defense imports declined by approximately 45% for major platforms compared to earlier periods. Increased domestic production of certain military equipment reduced import requirements. Technology transfer agreements with various nations supported development of indigenous defense manufacturing capabilities.

Strategic defense partnerships with Russia, the United States, France, and other nations provided access to military technology and equipment. These partnerships complemented indigenous production efforts.

Section 6: Global Trade Frameworks and Multilateral Engagement

Multilateral Organizations and Initiatives

India participates actively in multiple international trade and economic organizations. Membership in organizations including the World Trade Organization, BRICS, Shanghai Cooperation Organization, and regional groupings including ASEAN influences India’s trade policy development.

India maintained engagement with multiple forums addressing international economic issues, development assistance, and regional cooperation. These engagements reflect India’s role in global economic governance.

Regional Economic Partnerships

South Asian regional trade remained limited compared to potential, with intra-regional commerce representing approximately 5% of total Indian trade. Regional trade facilitation initiatives aimed to increase commerce within South Asia.

India engaged with Bangladesh, Nepal, Sri Lanka, and other regional nations on trade and connectivity issues. Development assistance and economic cooperation frameworks supported regional economic development.

BRICS Participation

India’s participation in BRICS reflected engagement with other major developing economies. The BRICS development bank, capitalized at $100 billion, provided development financing for member nations and other developing countries.

BRICS membership encompassed approximately 32% of global GDP, reflecting the economic significance of member economies. India’s participation in this grouping enhanced its voice in global economic governance.

Section 7: Digital Economy and Technology Trade

Information Technology Services

India’s information technology sector generated approximately $178 billion in annual exports. Software services, business process outsourcing, and IT consulting constitute major export categories. Global IT corporations maintain substantial operations in India supporting software development and technology services delivery.

The IT services industry employs millions of professionals and represents a significant source of foreign exchange earnings. India’s technology workforce education and training capabilities support continued IT services growth.

E-Commerce and Digital Trade

India’s e-commerce market reached approximately $120 billion in scale by 2025. Digital payment systems processed approximately 131 billion transactions during 2024. Digital trade and electronic commerce contributed increasingly to overall trade volumes.

Digital infrastructure development, payment system modernization, and regulatory frameworks supporting digital commerce facilitated e-commerce growth. Government initiatives promoted digital financial inclusion and electronic payment adoption.

Startup Ecosystem

India’s recognized startup ecosystem encompassed over 140,000 companies by 2025. Startups operated across technology, financial services, agriculture, healthcare, and other sectors. Government support including tax benefits and regulatory simplification supported startup development.

Foreign investment in Indian startups contributed to the ecosystem’s growth and success. Technology innovation emerging from the startup sector supported India’s economic transformation.

Section 8: Trade Challenges and Policy Responses

Tariff and Trade Restriction Concerns

Various trading partners implemented tariffs affecting Indian goods during 2025. These trade restrictions targeted specific sectors or product categories. India’s government engaged through diplomatic channels and bilateral trade discussions to address these measures.

Trade remedies available through international trade frameworks provided mechanisms for addressing trade disputes. India participated in various dispute resolution processes addressing trade disagreements.

Supply Chain Diversification

Global supply chain disruptions during recent years prompted businesses and governments to consider supply chain diversification and resilience. India emerged as an alternative supply source for certain products as companies reduced dependence on individual suppliers.

Government policies supporting manufacturing capacity in India positioned the nation as an attractive location for manufacturing investment and production relocation.

Currency and Exchange Rate Considerations

Rupee internationalization efforts aimed to increase use of the Indian currency in international trade. Currency swap agreements with various nations totaling approximately $75 billion supported rupee usage in bilateral commerce.

Digital rupee development through central bank initiatives explored digital currency applications in international trade.

Section 9: Financial Architecture and Trade Finance

Banking Sector Development

India’s banking sector expanded significantly, with digital banking adoption reaching approximately 99.5% of bank account penetration. Commercial credit growth maintained approximately 15.2% compound annual growth rate. Nonperforming asset ratios declined from 11.5% to 3.2%, reflecting improved credit quality.

Financial inclusion initiatives brought approximately 500 million new individuals into the formal banking system. Microfinance and small enterprise lending supported business development across the economy.

Trade Finance Mechanisms

Banks and financial institutions provided trade finance supporting import-export commerce. Trade credit facilities facilitated international commerce through documentary letters of credit, guarantees, and other mechanisms. Export credit agencies provided financing and insurance for export transactions.

Section 10: Sectoral Trade Developments

Pharmaceutical Industry Trade

India’s pharmaceutical industry exported approximately $24 billion in medicinal products during 2024-25. The sector supplied medications and active pharmaceutical ingredients to numerous countries. Generic pharmaceutical production supported affordable medication access globally.

Pharmaceutical exports grew approximately 15% annually during recent years. Regulatory approvals from major markets including the United States supported export growth.

Textile and Apparel Trade

India’s textile and apparel exports reached approximately $42 billion during 2024-25. The sector employed millions of workers across spinning, weaving, dyeing, and garment manufacturing. Trade agreements including those with various nations supported market access.

Textile exports grew approximately 12% annually despite competition from other suppliers. Indian textiles benefited from quality reputation and competitive pricing.

Engineering Goods Trade

Engineering goods exports encompassed machinery, metal products, and manufactured equipment reaching approximately $38 billion. The sector served diverse global markets. Export growth reflected rising manufacturing capabilities.

Section 11: Global Recognition and India’s Economic Standing

International Development Initiatives

India launched various development assistance programs supporting infrastructure, technology, and capacity building in other nations. Development partnerships reflected India’s commitment to South-South cooperation.

India’s development initiatives focused on areas including renewable energy, agriculture, and digital technology. Grant assistance and concessional loans supported development projects in partner nations.

Climate and Environmental Leadership

India committed to various international climate agreements and renewable energy initiatives. The International Solar Alliance represented India’s leadership in promoting renewable energy globally. Renewable energy capacity growth supported climate change mitigation.

India hosted various international conferences addressing climate change, sustainable development, and environmental issues. Leadership in these forums reflected India’s commitment to global environmental cooperation.

Section 12: Economic Projections and Future Outlook

Growth Targets and Economic Objectives

India’s economic growth rate maintained approximately 6-7% annually during recent years. Government objectives targeted approximately $7 trillion economy size by 2030. Merchandise export targets aimed for approximately $1 trillion by 2030.

Manufacturing sector targets included achieving approximately 25% share of GDP. Digital economy contributions targeted approximately $1 trillion by 2030. These objectives guided policy development and investment planning.

Trade Policy Direction

India’s trade policy emphasized selective protection of key sectors while expanding market access for competitive sectors. Regional trade agreements under negotiation aimed to expand market opportunities. Bilateral relationships received strategic attention.

Section 13: Frequently Asked Questions

Q1: What is the current scale of India’s trade with major partners, and how has it evolved?

India’s total merchandise trade reached approximately $1.47 trillion in 2025, representing approximately 90% growth since 2014. Trade with Russia reached $68.7 billion, representing approximately 5% of total Indian trade. India-US bilateral trade reached $190 billion. India-China trade continued at substantial volumes despite political tensions. These relationships evolved reflecting changing geopolitical conditions and economic factors.

Q2: How has India’s government responded to recent trade tensions and tariff announcements?

India’s government has pursued multiple response mechanisms including bilateral trade discussions, engagement through international trade frameworks, and domestic policy adjustments. Policies aimed to support domestic industries affected by external trade measures. Government emphasized dialogue and negotiation for resolving trade disputes through established mechanisms.

Q3: What role do energy imports play in India’s trade relationships and economic strategy?

Energy represents a critical import category for India, with crude oil constituting the largest single import item. Energy security considerations significantly influence trading relationships and supply sourcing decisions. India diversifies energy sourcing across multiple suppliers to reduce dependency. Renewable energy capacity growth aims to reduce future energy import requirements.

Q4: How significant is India’s defense manufacturing sector to overall trade and economic development?

Defense manufacturing valued at $13.8 billion represents approximately 1% of total merchandise trade but carries strategic importance. Defense exports grew 334% since 2014. Defense manufacturing supports technology advancement, skill development, and employment. Indigenous defense production reduces foreign exchange requirements for military equipment.

Q5: What is India’s approach to balancing trade relationships with multiple partners simultaneously?

India maintains trade relationships with numerous countries reflecting economic interests and partnership opportunities. Strategic partnerships with various nations provide trade, investment, and technology opportunities. India’s approach emphasizes mutual benefit and economic advantage rather than exclusive alignments. Multilateral organizations and frameworks structure India’s broader engagement.

Q6: How do India’s digital economy and technology services contribute to overall trade performance?

Technology services generated approximately $178 billion in annual exports by 2025. Information technology services and business process outsourcing represent major contributors. Startup ecosystem development supports emerging technology exports. E-commerce and digital trade growing substantially. Digital payments and financial technology contribute to trade facilitation and overall economic modernization.

Q7: What agricultural trade achievements has India accomplished, and how do these support economic objectives?

Agricultural exports reached $52.4 billion during 2024-25, making India a significant agricultural exporter. Major exports include rice, wheat, sugar, and spices. Agricultural policies emphasize farmer welfare and productivity improvement. Export growth supports rural income generation and agricultural sector development. Self-sufficiency in various agricultural commodities reduces import requirements.

Q8: What are India’s medium-term trade policy objectives and targets for 2030?

India targets approximately $1 trillion merchandise exports by 2030. Manufacturing sector targets include 25% share of GDP. Digital economy targets approximately $1 trillion contribution. Renewable energy capacity targets aim for 825 gigawatts. Regional trade expansion and multilateral engagement represent ongoing objectives. These targets guide policy development and investment prioritization across the economy.

Section 14: Key Takeaways and Implications

India’s Evolving Global Economic Position

India’s trade expansion and diversification have strengthened its global economic position. Growth rates significantly exceeding global averages support economic advancement. Participation in multiple regional and international frameworks enhances India’s voice in economic governance and policy development.

India’s manufacturing expansion and technology development support economic transformation. Services sector strength provides significant foreign exchange earnings. Agricultural sector modernization supports rural development and global food security.

Trade Relationship Complexity and Management

Managing multiple significant trading relationships requires sophisticated diplomatic and economic engagement. India balances relationships reflecting economic interests and strategic considerations. Trade disputes require management through established frameworks and bilateral engagement.

Regional trade expansion opportunities remain under-realized, suggesting potential for increased South Asian economic integration. Multilateral frameworks provide mechanisms for addressing trade issues and expanding commerce.

Future Trade Dynamics

India’s continued economic growth supports trade expansion and increased participation in global commerce. Technology advancement, manufacturing capacity growth, and services sector expansion create new trade opportunities. Energy transition may reshape India’s energy import patterns and trading relationships.

Renewable energy development supports climate objectives while potentially reducing certain import requirements. Digital economy growth represents emerging trade opportunity with significant growth potential.

About the Author

Nueplanet

Nueplanet is an international trade analyst and geopolitical economics researcher specializing in emerging market trade patterns, bilateral trade relationships, and global economic governance. With expertise in analyzing trade policy, international commerce dynamics, and economic development patterns, Nueplanet provides detailed factual analysis of trade relationships and economic developments affecting nations and global commerce.

All content is developed using verified information from official government trade statistics, international organization databases, authoritative news publications, and verified research reports. Nueplanet maintains commitment to factual accuracy, transparent sourcing, and evidence-based analysis in all written work. The author prioritizes comprehensive understanding of complex trade dynamics and avoids promotional language or subjective interpretation of economic data.

Nueplanet’s analysis emphasizes accurate economic documentation, proper statistical contextualization, and recognition of multiple perspectives on trade relationships and economic policy. The author’s goal is providing readers with factually accurate, well-researched information about international trade developments and economic relationships.

About This Content

This article provides factual, research-based analysis of India’s international trade relationships, trade policies, and global economic engagement. Information is sourced from official government trade statistics, international organization publications including World Bank and World Trade Organization data, industry reports, and authoritative news publications including Reuters, Associated Press, and major international business news sources.

All trade figures, economic statistics, and bilateral trade data reflect documented information from official sources or widely-reported data from multiple reliable sources. This content emphasizes accuracy, proper statistical interpretation, and factual documentation of trade relationships and economic developments. The article examines India’s trade across multiple dimensions including sectoral composition, bilateral relationships, policy responses, and economic strategy.

Content Verification Date: November 2025

Key Sources Referenced: Official Indian government trade statistics, World Bank databases, WTO publications, international business news services, bilateral government announcements.

Additional Resources

Readers seeking comprehensive information about India’s international trade can access official data from the Indian Ministry of Commerce and Industry, which publishes detailed trade statistics and policy information. The World Bank and World Trade Organization maintain databases providing comparative trade information and bilateral trade data.

International business publications including Reuters, Bloomberg, and Financial Times provide ongoing coverage of trade developments and international commerce. Government announcements and official releases provide information about trade agreements and policy changes affecting India’s trade relationships.

Helpful Resources

• NDTV Business on US Trade

• TOI Article on Trade War

• Economic Times Global News

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