Foreign trade in India includes all imports and exports to and from India. At the central government level, trade is administered by the Ministry of Commerce and Industry. Foreign trade accounted for 46% of India's GDP in 2025. India is a net exporter of services and a net importer of merchandise. In 2025, the World Bank noted that the Indian economy is less open to trade now, than in the previous decade.

Until independence from the British in 1947, the government of India maintained semi-autonomous diplomatic relations and was a founding member of both the League of Nations and the United Nations. After independence, India joined the Commonwealth of Nations and adopted a foreign policy of non-alignment during the Cold War, while developing close economic ties with the Soviet Union. The country also followed Soviet-style economic policies and chose to remain largely closed to international trade until economic liberalisation, following a balance-of-payments crisis in July 1991.

Before liberalisation, average tariffs exceeded 200 percent, and imports were subject to extensive quantitative restrictions. Post 1991, foreign trade has been one of the major drivers of growth in the Indian economy. Economic reforms through the 1990s and 2000s gradually reduced tariffs and opened several sectors to foreign competition. India's share in global merchandise trade is less than 3%. Despite reforms, India continues to be among the most difficult countries to trade with and is one of the most frequent litigants at the World Trade Organization, both as a complainant seeking market access to other countries, and as a defendant supporting its tariff and non-tariff barriers to trade.

India's main merchandise exports are pharmaceuticals, oil and gas, gems and jewellery, automobiles and automobile parts, and raw agricultural commodities. However, the country's exports are spread across a variety of sectors.

Historical background

India's trading history stretches back two millennia: the Periplus of the Erythraean Sea documents trade between India and the Mediterranean world. The Periplus was written by an anonymous sailor from Alexandria around 100 CE, and describes trade between countries, including India. European trade with India historically took place through the Silk Route, but intensified following Vasco da Gama's 1498 landing at Calicut. The Portuguese, Dutch, French, and British trading companies competed for access to Indian spices, textiles, and other goods for over three centuries following the discovery of a sea route to India.

In 1498, Portuguese explorer Vasco da Gama landed in Calicut (modern-day Kozhikode in Kerala), and was the first European to ever sail to India. The profit made during this trip made the Portuguese eager to trade more with India and attracted other European navigators and tradesmen. Pedro Álvares Cabral left for India in 1501 and established Portuguese trading posts in Calicut and Cochin (modern-day Kochi), returning to Portugal in 1501 with pepper, ginger, cinnamon, cardamom, nutmeg, mace, and cloves. The profits made from this trip were substantial.

Until independence, the Government of India maintained semi-autonomous diplomatic relations. It had colonies (such as the Aden Settlement), which sent and received full missions,High Commission of India in Australia: India Australia Relations . Hcindia-au.org (20 April 2011). Retrieved 12 November 2011. and was a founding member of both the League of NationsFirst Assembly, Geneva, 15 November – 18 December 1920 . Indiana.edu (18 December 1920). Retrieved 12 November 2011. and the United Nations. After India gained independence from the United Kingdom in 1947, it soon joined the Commonwealth of Nations and strongly supported independence movements in other colonies. During the Cold War, India adopted a foreign policy of non-alignment, but developed close ties with the Soviet Union.

1991 economic reform

Before the 1991 economic liberalisation, India was largely a closed economy. Average tariffs exceeded 200 percent, and extensive quantitative restrictions on imports were imposed as part of the government's agenda to follow a 'socialist pattern of society' following the Avadi resolution of Indian National Congress in 1955. The country had a restrictive import policy from the late 1950s onwards. Foreign investment was restricted to allow only Indian ownership of businesses; import of any commodity required licencing and approval from the government. A World Bank report in 2025 noted that India was less open to trade in 2025, compared to the previous decade.

Since liberalisation, India's economy has improved mainly due to increased foreign trade. Reforms in India in the 1990s and 2000s aimed to increase international competitiveness in various sectors, including auto components, telecommunications, software, pharmaceuticals, biotechnology, research and development, and professional services. These reforms included reducing import tariffs, deregulating markets, and lowering taxes, which led to increased foreign investment and high economic growth. From 1992 to 2005, foreign investment increased by 316.9%, and India's GDP grew from $266 billion in 1991 to $3.96 trillion in 2025.Dutta, M. K. and Sarma, Gopal Kumar, Foreign Direct Investment in India Since 1991: Trends, Challenges and Prospects (1 January 2008). However, India's share in global merchandise trade is less than 3 percent, while service exports are over 10% of its GDP in 2025.

Trade policy Despite 35 years of liberalisation, India's tariffs remain comparatively high among other major economies, and its regulatory environment continues to be an obstacle for its trading partners. Scholars have noted that the country still practices restrictive measures, such as quantitative restrictions and complex bureaucratic procedures.

Tariff barriers According to the World Trade Organization's tariff and trade data, the simple average most-favoured nation tariff in 2025 was 15.8 percent, with an effective applied tariff rate of 5.4 percent across all commodities, compared to 2.2 percent in China, 1.8 percent in Indonesia, 1.1 percent in Vietnam, and 1.3 percent for the European Union. The 2025 National Trade Estimate Report on Foreign Trade Barriers, prepared by the United States Trade Representative, noted that India's tariffs were highest of any major world economy, with an applied tariff rate of 13.5 percent for non-agricultural goods and 39 percent for agricultural goods (applicable to US goods).

India maintains high tariffs on a wide range of goods; some examples include vegetable oils (up to 45%); apples, corn, and motorcycles (50%), automobiles and flowers (60%), natural rubber (70%), and alcoholic beverages (150%), in addition to high basic customs duties. The government of India often announces increased in tariffs in its annual budget without prior notices or public consultations, making the country an unreliable trade partner.

Non-tariff barriers

India maintains several non-tariff barriers, including many prohibited items, licence requirements for certain goods, and restrictions to sell only to government-controlled monopolies in some goods. It has also imposed mandatory Quality Control Orders on hundreds of items through the Bureau of Indian Standards, making domestic testing and certification by a government-approved laboratory mandatory. Additionally, the country has placed price controls on medical devices. Import licencing is maintained for over 400 products, Sanitary and phytosanitary measures on 250 product categories, and technical barriers to trade on about 228 product categories. Further, India has been accused of inconsistently applying customs procedures and recurring customs-valuation disputes.

Relations with WTO India has been one of the most active users of the World Trade Organization's dispute settlement mechanism since its establishment in 1995. As of , there are nine trade disputes pending against India. The disputes involve production-linked incentives, tariffs on information and communication technology products, safeguard measures for certain iron and steel products, and support to the sugar industry.

As per the WTO database on dispute settlement, which lists 646 total disputes, India has initiated 24 cases and has been a respondent in 34 cases. It has participated in 187 cases as a third party, making it an interested party in over one-third of cases. Scholars have alleged that India is a force for obstruction at the WTO, partnering with different groups of countries and disrupting the organization.

Both developing and developed countries have accused India of holding up the WTO reform process. Being the only dissenter, the country had blocked the historic Trade Facilitation Agreement in 2014. In July 2023, along with Turkey and South Africa, India blocked the Investment Facilitation for Development agreement. In March 2026, after South Africa and Turkey withdrew their objections, it remained the only country to oppose the IFD agreement.

Trade in services

As of 2023, India is the seventh-largest exporter of commercial services in the world, accounting for 4.6% of global trade in services. India's service exports grew by 27% in FY 2023. In September 2023, India's services industry accelerated, helped by robust demand in the sector. A recent survey also indicated that businesses displayed the highest level of optimism in over nine years. According to S&P Global's India services purchasing managers' index, the index rose to 61.0 in September 2023, compared to 60.1 in the preceding month. This surpassed projections in a Reuters poll, which had anticipated a slight dip to 59.5.

The spectrum of India's services exports encompasses a diverse array of sectors, ranging from information technology (IT) to the provision of medical services by professionals overseas. The RBI, while not providing monthly disaggregated data on services exports, periodically releases a classification of such exports as part of its quarterly balance of payments data. This classification encompasses transport, travel, construction, insurance and pensions, financial services, telecommunications, computer and information services, as well as personal, cultural, recreational services, among other business services.

Within India's services export landscape, software exports retain a dominant position. However, noteworthy is the recent surge in "other business services" exports, which constituted 24 percent of the total services exports in the initial nine months (April–December) of FY23. This marks a notable increase from the 19 percent reported in FY14. This category encompasses a range of services including legal services, accounting, auditing, book-keeping, tax consultancy services, management consulting, managerial and public relations services, as well as advertising, market research, and public opinion polling services.

Exports and imports

India exports approximately 7500 commodities to about 190 countries, and imports around 6000 commodities from 140 countries.

Pharmaceutical industry

Oil and gas industry

Diamond Processing

Automotive Industry

Trade statistics Overall foreign trade data in billion US$ +FYMerchandise Exports Merchandise ImportsTotal Merchandise TradeMerchandise Trade BalanceService Exports Service ImportsTotal Service TradeService Trade BalanceNet Overall Trade2024-25437.416 720.2431157.659-282.827387.540198.717586.257+188.823-94.0042023-24437.072 678.2151115.287-241.143341.107 178.324519.431+162.783-78.360

Summary table of recent India foreign trade (in billion $):