We can be the factory to the world: Budhia

India’s export landscape in 2025 faces a complex interplay of global conflicts, economic uncertainties, and shifting trade dynamics. Sanjay Budhia, Chairman of the CII National Committee on EXIM and MD of the PATTON Group, shares his insights on navigating these challenges. From leveraging India’s trade diversification efforts to addressing liquidity constraints and the impact of reciprocal tariffs, Budhia discusses strategies to bolster export growth. He highlights key sectors and regions poised for expansion while emphasizing the critical role of government interventions in ensuring competitiveness and resilience.

How do you see India’s exports growth in 2025 at a time when the globe is facing challenges due to war and conflicts in different parts of the world

India’s exports in 2025 are expected to demonstrate resilience and growth despite global challenges posed by conflicts and economic uncertainties. The government and industry are collectively working toward achieving a target of $2 trillion in exports by 2030, building on the robust performance of $778 billion in FY23-24 for goods and services combined. Indian exports are projected to surpass $800 billion in FY25.

This optimism is driven by India’s proactive diversification of export destinations and its focus on high-growth sectors. Moreover, the gradual recovery in developed markets like the US and the EU, along with increasing trade partnerships with emerging economies, will play a pivotal role. Additionally, India’s strong push toward integrating into global supply chains for electronics, engineering, automotive parts, chemicals, and textiles positions the country favorably in an evolving geopolitical landscape.

India is also poised to leverage opportunities arising from shifting trade dynamics. Indian firms are enhancing their capabilities to cater to global demand in consumer electronics, electrical components, and other manufacturing segments. Furthermore, the government’s policies supporting rupee trade and trade agreements with nations such as Australia and the UAE have further strengthened India’s export potential.

Adding to the woes, Trump has treated to impose reciprocal tariffs on countries including India, China, Mexico and Canada. Do you see this threat as a challenge or opportunity for Indian exporters.

The prospect of reciprocal tariffs by Mr. Donald Trump, targeting countries including India, presents both challenges and opportunities for Indian exporters. While such measures could disrupt specific trade flows, they also offer a unique chance for India to position itself strategically in the global supply chain.

These reciprocal tariffs could lead to higher costs for Indian goods in the US market, particularly in price-sensitive sectors such as engineering, textiles, garments, and automotive components. This might reduce competitiveness, especially when compared to lower-cost producers or nations with preferential trade agreements. Additionally, any escalation in trade tensions could slow overall demand, particularly in developed markets, further complicating growth prospects for Indian exporters.

However, these challenges also bring potential opportunities. Tariffs on competitors like China could open opportunities for Indian exporters to expand their market share in the US. For instance, sectors such as consumer electronics, mobile phones, televisions, and electrical equipment are well-positioned to fill supply chain gaps.

Moreover, India’s growing focus on trade diversification and its emerging reputation as a reliable alternative to China can bolster its attractiveness to global buyers.

What steps the government should take to help exporters in such a challenging time. Do you seek incentives for exporters to boost shipments.

While we do not seek incentives, there are several policy interventions through which the government can support exporters during these challenging times. The first priority should be optimizing the Remission of Duties and Taxes on Export Products (RoDTEP) Scheme. Streamlining its implementation by transferring benefits directly to exporters’ bank accounts, rather than through credit scrips, can reduce administrative delays and enhance efficiency. The government should validate the RoDTEP scheme for three years to provide long-term visibility to exporters to secure business.

On the financing front, easy access to affordable credit remains crucial. The Interest Equalization Scheme, valid until December 2024, should be extended for a longer term of three years to provide stability and a level playing field for Indian manufacturers. This should be extended to all exporters, not restricted to only MSMEs.

The government should provide incentives to exporters for adopting global quality certifications to position Indian goods as premium products. Additionally, it should assist Indian firms in building global brands, especially in sectors like textiles, engineering, pharmaceuticals, and IT services.

These interventions are not about incentivizing exports but about creating an enabling ecosystem that supports exporters in navigating global challenges, boosting competitiveness, and ensuring sustained growth in exports.

Which are the key sectors and countries where you see healthy exports growth in 2025.

India is expected to witness healthy export growth in electronics, engineering, automotive parts, chemicals, textiles, garments, and consumer goods in 2025. Sectors such as footwear, furniture, and toys are also likely to contribute significantly, benefiting from global shifts in supply chains and reduced dependence on China. The electronics and electrical equipment sector is poised for substantial growth, particularly targeting markets like the US and EU, driven by the ongoing reconfiguration of global trade due to tariff measures on Chinese goods. Additionally, Indian firms are gaining traction as reliable suppliers of consumer electronics, mobile phones, and electrical components, supported by policy initiatives such as the PLI scheme.mpost