# How does India trade with the world? > From $1.3 bn in 1948 to $445 bn in exports by 2025, India's trade has multiplied. But a persistent goods deficit of $308 bn is offset by services and remittances. **India trades more than ever, but still imports more than it exports** India's merchandise trade has grown a hundredfold since Independence. In 2025, exports hit US$ 445.28 billion and imports US$ 753.48 billion, leaving a goods deficit of US$ 308.2 billion. Services now earn a surplus of US$ 138.85 billion, and remittances add another US$ 137.67 billion, softening the external imbalance. Measured against GDP, exports and imports together now account for about 44.7% of the economy. On a per-person basis, however, India's trade is still just US$ 800 a year. The current account deficit, the broadest measure, stood at 0.8% of GDP in 2024. India's commerce with the world has been transformed over seven decades. The numbers are vast, but the patterns are clear: India sells far less goods than it buys, services are a rising strength, and money sent home by Indians abroad is a lifeline. Here is the full story, chart by chart. ## How much does India trade, and how did it get here? In 1948, India's merchandise exports were a modest US$1.3 billion. By 2025, they had climbed to US$445.28 billion. Imports grew even faster, from US$1.43 billion to US$753.48 billion. The chart shows both lines rising almost together, but with imports pulling away decisively after the 2000s. Before 1991, trade grew sluggishly. Liberalisation, then the 2000s global boom, and a surge in oil and electronics imports pushed the lines skyward. Today, India is a major trading nation, but the goods deficit is structural: it has widened from a negligible minus US$0.13 billion in 1948 to minus US$308.2 billion in 2025. The takeoff is recent, two-thirds of this trade volume was added in just the last twenty years. ## Why does India buy more goods than it sells? India's merchandise trade balance has been negative every year since 1948, with only a brief exception in the early 1970s. The deficit has ballooned from near zero to US$308.2 billion in 2025. Why? One visible reason in this data is India's heavy import dependence on crude oil, gold, and electronic goods, while its exports, petroleum products, gems and jewellery, engineering goods, have not kept pace. The deficit is not necessarily bad; it means India is investing and consuming more than it earns from goods sales. But it also means the country must find other ways to pay, which is where services and remittances come into the picture. ## Is India really that open? Comparing trade to GDP Dollar numbers can mislead because the whole economy has expanded. Trade as a share of GDP tells us how open India really is. In 1960, exports of goods and services were just 4.5% of GDP and imports 6.8%. By 2024, exports had risen to 21.2% and imports to 23.5%. That is more than a fourfold increase in openness. The chart shows a sharp climb after 1991, a leap in the mid-2000s, and a plateau after the global financial crisis. Even so, India's trade-to-GDP ratio peaked around 55% in 2011-12 and has since fallen back, reflecting both slower global trade growth and a rising domestic economy. For the common reader, this means roughly one in every five rupees spent in India flows across a border. ## Is India becoming a bigger part of world trade? India's share of world merchandise exports is a revealing number. In 1948, it was 2.2%. Seventy-seven years later, it is 1.7%. That seems like a decline, but it masks a U-shaped story. The share fell to a low of 0.5% in the early 1990s as other Asian economies raced ahead, then recovered slowly to 1.7% by 2025. The trend since 2000 is upward, but India still accounts for a small slice of global goods exports, roughly one in every sixty dollars of world merchandise trade. Services exports are a brighter spot, where India's share is larger, but for goods, the climb has been modest. ## How much of export 'growth' is just higher prices? Export value can rise because you sell more, or because prices go up. The chart separates the two. In 1980, both the value index and the volume index started near 3.2 and 5.1 (2015=100). By 2025, the nominal value index had reached 166.2 while the real volume index stood at 141.7. The gap is the difference: part of the 'growth' is just inflation or higher global prices. But real volumes have still multiplied by nearly 28 times since 1980. So while inflation matters, India genuinely ships a lot more stuff today than it did forty years ago. ## How much does trade matter for a person in India? The headline totals look giant, but India has 1.45 billion people. Trade per person, exports plus imports of goods, was just US$8 in 1960. By 2024, it had reached US$800. That is a hundredfold rise, but in absolute terms it remains modest. For comparison, the world average is several thousand dollars. The chart makes clear that India's trade integration is still shallow at the individual level. Even as container ports bustle and export parks hum, the typical Indian buys or sells only a few hundred dollars worth of goods with the rest of the world each year. ## Who fills the gap left by the goods deficit? The goods deficit of US$308.2 billion in 2025 does not tell the whole story. This chart brings in three flows: goods balance, services balance, and remittances. The red goods line plunges deeper into deficit. But the green services line shows a growing surplus, reaching US$138.85 billion in 2025, thanks to IT, business services, and consultancy exports. The blue remittance line brings another US$137.67 billion (2024 data). Together, services surplus and remittances covered almost 90% of the goods deficit in 2024-25. Without them, India's external position would look far more precarious. ## What happens when we add services to goods trade? Combine merchandise and commercial services, and the net trade picture improves but remains in deficit. The net trade balance (goods + services) stood at minus US$169.36 billion in 2025. That is roughly half the goods-only deficit. The line has fluctuated between minus US$121 billion and minus US$169 billion over the last fifteen years, with no clear trend. Services have prevented the combined deficit from exploding along with the goods deficit. Still, even with services included, India spends more than it earns from international trade in goods and services combined. ## Why are remittances so important for India? India is the world's top recipient of personal remittances. As a share of GDP, they have grown from 0.4% in 1975 to 3.5% in 2024. In dollar terms, that is US$137.67 billion flowed in from overseas Indians in 2024. The chart traces a steady climb, with a jump after the 1990s Gulf migration boom and another surge in the 2000s as the Indian diaspora expanded into skilled professions worldwide. Remittances are now larger than the services surplus, and they provide a stable, counter-cyclical inflow, often rising when the home economy slows. For millions of families, this is the money that pays for housing, education, and emergencies. ## Is India living within its external means? The current account balance is the fullest measure: it captures trade in goods and services, remittances, and income from investments. Since 1975, India has run a deficit in most years. The latest reading, for 2024, is minus 0.8% of GDP, small by historical standards. Deficits of 3-4% in 2011-12 prompted worries, but today's gap is manageable. The line has seesawed, with rare surpluses in 2001-04 and again briefly in 2020. A current account deficit is not inherently good or bad; it means India invests more than it saves, with the rest financed from abroad. The chart shows that, overall, India has mostly balanced its external books within a narrow band, thanks to the cushion of services and remittances. ## Sources - WTO trade statistics for merchandise exports, imports, and volume/value indices, compiled and derived for this page. - World Bank data on exports and imports of goods and services as a percentage of GDP, personal remittances received, and current account balance. - Trade per capita is derived as total merchandise trade divided by population, using WTO and UN population estimates. - Services trade balance and net goods+services balance are derived from WTO and IMF data. - Remittances as a share of GDP is derived using World Bank GDP data. --- Source: [This Indian Life](https://thisindianlife.today/articles/how-does-india-trade-with-the-world/) · Updated 2026-06-03. Licensed CC BY 4.0. 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