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The Role of Shipping in India’s Import-Export Market Development
16/01/2025
One of the world's largest and fastest-growing markets, India, is a key player in international trade. This status is the result of progressive trade policies implemented during the 1991 reforms that liberalized commerce. These reforms opened the door to global markets, increased foreign investment and sparked economic growth.
With the globalization of its economy, Indian industries have been able to take advantage of new trade opportunities and build relationships with global partners. This interconnectedness has also exposed them to the complexity of global events, economic trends and infrastructural challenges. As well as the challenges common to international trade such as navigating international regulations and global supply chains.
Shipping plays a key role in enhancing the efficiency and reliability of import and export business in India. The ability to transport goods swiftly and securely, both domestically and internationally, will ensure businesses can consistently meet customer expectations and compete effectively in the international market, taking advantage of emerging opportunities.
With the globalization of its economy, Indian industries have been able to take advantage of new trade opportunities and build relationships with global partners. This interconnectedness has also exposed them to the complexity of global events, economic trends and infrastructural challenges. As well as the challenges common to international trade such as navigating international regulations and global supply chains.
Shipping plays a key role in enhancing the efficiency and reliability of import and export business in India. The ability to transport goods swiftly and securely, both domestically and internationally, will ensure businesses can consistently meet customer expectations and compete effectively in the international market, taking advantage of emerging opportunities.
From India to the World:
India Exports and Global Influence
India’s export business has evolved and expanded since embracing global trade. As a result, merchandise exports today are valued at $451 billion, a $137 billion increase from the previous decade.
The most exported products from India are petroleum products, pharmaceuticals, telecom instruments, aluminium, precious stones, rice and industrial by-products. In addition to this, India’s services sector makes up over a third of its total export income.
The main export markets for India are the United States, the United Arab Emirates and China, with the United States accounting for more than 17% of Indian exports in 2022/23. However, new export partners continue to emerge, and Singapore, the Netherlands, and Bangladesh have all recently expanded their imports from India.
Driving Global Integration and
Economic Growth: India Imports
India’s import business is a vital component of its economy. Over the last 10 years, it has grown by 7% year-on-year. This steady increase has seen the value of imports rise by $266 billion since 2013/14. This growth is driven by the demand for consumer goods, industrial materials and energy resources, along with the desire to fully engage in the global market and lower production costs.
India’s main imports include a diverse range of goods. These include manufactures like electronics, machinery and equipment as well as fuel products like crude petroleum, coal briquettes and petroleum gas. In addition to these, India imports precious stones like diamonds and pearls, along with edible oils and chemical fertilizers.
The main suppliers to India include China, the United Arab Emirates, the United States, Saudi Arabia and Iraq.
Key Factors Driving the Development of India’s Import and Export Business
Various factors are driving the development of India’s import and export business.
Promoting growth: Production-linked incentives
Currently, Indian imports exceed Indian exports. This has resulted in a trade deficit of close to 2% of GDP. While this is offset in part, due to India’s surplus of exported services and net positive secondary income, the country is keen to establish itself as a self-sufficient player in the global market. In pursuit of this, India launched the “production-linked incentive” (PLI) in 2020. Through financial rewards to critical industries that meet production targets, the scheme aims to strengthen the domestic economy, reduce India’s reliance on imports and increase its export competitiveness.
Key Factors Driving the Development of India’s Import and Export Business
Various factors are driving the development of India’s import and export business.
Promoting growth: Production-linked incentives
Currently, Indian imports exceed Indian exports. This has resulted in a trade deficit of close to 2% of GDP. While this is offset in part, due to India’s surplus of exported services and net positive secondary income, the country is keen to establish itself as a self-sufficient player in the global market. In pursuit of this, India launched the “production-linked incentive” (PLI) in 2020. Through financial rewards to critical industries that meet production targets, the scheme aims to strengthen the domestic economy, reduce India’s reliance on imports and increase its export competitiveness.
Building bridges: India’s Foreign Trade Policy
India’s Foreign Trade Policy (FTP) is also driving development in the country’s import and export sales. The 2024 policy outlines four key areas of focus. “Incentive to remission” is one of the pillars of this policy and represents a shift from offering exporters direct financial rewards to reducing their costs and administrative burdens. On top of this, performance-based entitlements will be provided for compliance. With fewer costs and streamlined administrative tasks, exporters will be empowered to explore new markets.
“Export promotion through collaboration” is another pillar in India’s Foreign Trade Policy. This initiative focuses on knowledge-sharing and relationship-building to strengthen Indian export capabilities. With training initiatives and local government committees promoting export opportunities and best practices, exporters can build sustainable and reputable business practices.
The third pillar in India’s FTP is “Ease of doing business” which is focused on facilitating easy business practices through digitalization and merchanting trade provisions. By leveraging digital technologies for documentation management, exporters stand to benefit from reduced costs and more efficient supply chains. With an expanded range of goods eligible for merchanting trade, exporters can capitalize on increased trade opportunities while mitigating the risks associated with supply and demand fluctuations and respond quickly to emerging market opportunities.
“Emerging areas” is the last pillar of India’s FTP. This pillar is dedicated to the successful integration of global standards and innovative technologies. As part of this, the Indian government is focusing on promoting e-commerce exports and as such is actively developing infrastructure and training to help businesses join e-commerce platforms. Through these innovations, exporters will be able to reach wider markets and foster positive customer experiences.
Unlocking potential: Infrastructure development
India’s ambitious infrastructural development initiatives are also key factors driving the development of its import and export markets. Despite currently having in cases congested roads, railways, seaports and airports or inefficient infrastructure, India is committed to overcoming these challenges. With investment in airports, inland waterways, intermodal logistics and last-mile delivery a top priority, India is working to enhance supply chain efficiency through sustainable infrastructural development.
Breaking barriers: Import licensing requirements
India has made importing products easier over the last decade. Most products can be imported under Open General License (OGL) regulations which means that they can be freely imported unless they are banned or prohibited items, restricted or ‘canalized’ items. As a result, India’s imports have fewer bureaucratic hurdles, making it easier for businesses to infiltrate the Indian market.
Businesses need to provide import declarations and letters of credit when importing to India. These documents help to ensure regulatory compliance and accountability.
Some items may need advance licenses to access duty-free importation into India, this is particularly relevant to manufacturers, exporters and suppliers involved in the production of goods manufactured to be exported. These licenses contribute to the development of India’s imports by allowing businesses to import goods duty-free or at reduced rates.
Ultimately, transparent, predictable and streamlined importing requirements build trust and confidence in Indian trade.
How can Shipping Facilitate the Development of the Indian Import and Export Markets?
India’s imports and exports aren’t without their challenges same as for any other country. Logistical inefficiencies like poor coordination between stakeholders and improper paperwork can contribute to delays. Meanwhile, infrastructural development needs, high costs and poor visibility can make supply chains less reliable and sustainable and impact global trust.
Partnering with an efficient shipping carrier can help to mitigate these challenges. Experienced shipping carriers will be able to:
- Provide real-time tracking and visibility of your shipments to give you and your customers peace of mind.
- Provide global coverage to allow you to expand your market reach.
- Offer tailor-made solutions to meet your specific shipping needs.
- Navigate complex international regulations and documentation.
- Optimize shipping routes to ensure your goods are delivered quickly and cost-effectively.
- Deliver intermodal solutions to provide seamless supply chain connectivity.
In this way, you can enhance your market position and bolster India’s overall trade capabilities.
- Provide real-time tracking and visibility of your shipments to give you and your customers peace of mind.
- Provide global coverage to allow you to expand your market reach.
- Offer tailor-made solutions to meet your specific shipping needs.
- Navigate complex international regulations and documentation.
- Optimize shipping routes to ensure your goods are delivered quickly and cost-effectively.
- Deliver intermodal solutions to provide seamless supply chain connectivity.
In this way, you can enhance your market position and bolster India’s overall trade capabilities.
Smooth Sailing with MSC
At MSC, we pride ourselves on connecting India to the world through reliable and efficient shipping solutions. So, whether you are importing goods to India or exporting them out, our team of local and global experts can ensure your shipments arrive on time, every time. Contact us today to find out more.
