Budget 2025: New export promotion mission aims to boost growth and narrow trade deficit

Finance minister Nirmala Sitharaman on Saturday, 1 February, unveiled an Export Promotion Mission, spearheaded by the ministries of commerce, finance, and micro, small, and medium enterprises (MSME), to position exports as a key driver of economic growth.

Part of the budget announcements for 2025-26, the initiative aims to narrow India’s trade deficit, which hit a record $32.8 billion in November 2024. As part of the plan, the finance ministry will streamline credit access for exporters, addressing a major hurdle for businesses seeking global markets.

Earlier, Mint reported that the government was working on a model to support MSMEs with export financing, helping shield them from payment defaults by importing countries. Additionally, the European Union (EU) is collaborating on projects to assist Indian MSMEs in navigating compliance with its Carbon Border Adjustment Mechanism (CBAM), Corporate Sustainability Due Diligence Directive (CS3D), and other regulatory frameworks.

Sitharaman also announced the creation of Bharat Trade Net, a unified digital platform for trade documentation, aimed at simplifying export procedures.

The Economic Survey 2024-25, released on Friday, flagged concerns over sluggish goods export growth amid weak global demand. While robust domestic consumption has driven up imports, higher net services receipts and strong remittances have partially offset the widening trade deficit.

As global trade shifts towards protectionism, the survey called for a new strategic trade roadmap, focusing on reducing trade costs, improving facilitation, and enhancing competitiveness. It also warned that the EU’s CBAM, framed as an environmental safeguard, could impose significant risks on Indian exports, potentially widening the current account deficit.

India’s merchandise trade deficit eased to a three-month low of $21.94 billion in December, supported by higher exports, according to commerce ministry data. Merchandise exports for April-December 2024 reached $321.71 billion, a 1.6% increase from the same period in 2023.

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With exports already crossing $600 billion by December 2024, the Commerce Ministry remains optimistic about meeting its $800 billion export target for the fiscal year.