India’s export growth is shifting toward ASEAN, Africa, and South Asia, with shipments to these regions rising significantly in early FY27. This diversification helps reduce dependence on slower-growing North American and European markets. Total exports reached $232.73 billion for the April-June quarter, though a $37.42 billion trade deficit remains a point to track.
India is witnessing a notable change in its trade dynamics as shipments to emerging markets in ASEAN, Africa, and South Asia outpace growth in traditional Western destinations. Data from the Commerce Ministry for the April-May period of fiscal year 2027 shows that exports to ASEAN countries grew by 66.9% compared to the same period last year. Meanwhile, exports to Africa climbed by 53.1%, and shipments to South Asia recorded a 40.2% increase.
This trend represents a broader shift in India's export strategy. These three regions collectively added more than $7.6 billion to India's export revenue year-on-year. Currently, markets outside of North America and Europe account for more than 50% of India's total export portfolio, providing a buffer against slower demand in Western economies. Overall, India’s goods and services exports rose 11.37% to $232.73 billion during the April-June quarter.
Specific countries have emerged as major growth engines. Tanzania led the expansion with a 146.9% increase in demand for Indian goods, followed by Sri Lanka at 124.6%, Singapore at 101.2%, and South Africa at 76.5%. By contrast, demand from more established trade partners remained lukewarm, with exports to Europe growing by 4% and to North America by 2.6%. Additionally, exports to China grew by 27.54%, indicating strong regional trade activity.
While the export growth in emerging markets is positive, the overall trade balance remains sensitive to import costs. India reported a merchandise trade deficit of $37.42 billion for the April-June quarter. This deficit is largely driven by high demand for petroleum, electronic goods, and gems and jewellery. Specifically, imports from China reached $38.04 billion in the first quarter, fueled by the domestic requirement for electronics.
Looking ahead, India is balancing its trade relations by actively discussing a potential trade agreement with the United States to address long-term partnership goals. Simultaneously, the country is increasing its energy imports from the US as part of a strategy to diversify its energy supply sources. For investors and market observers, the key monitorable will be whether this growth in non-Western markets can remain sustainable enough to offset the persistent trade deficit and manage the costs associated with rising electronic and energy imports.