India’s export landscape is witnessing a significant transformation. Once dominated by petroleum and traditional commodities, the country’s trade profile is rapidly evolving—with electronics emerging as one of the fastest-growing export sectors. This shift marks a crucial step toward diversification and resilience in India’s external trade, aligning with the government’s long-term vision to make India a global manufacturing hub.

Electronics Lead the Next Export Wave

Over the past few years, India has steadily strengthened its position in global electronics manufacturing—especially in smartphone production. Global tech giants such as Apple, Samsung, and Dixon Technologies have expanded their local manufacturing bases under the Production-Linked Incentive (PLI) scheme, leading to a surge in exports of mobile phones, components, and semiconductors.

In the first six months of FY26, electronics exports surged by 42% to reach USD 22.2 billion, up from USD 15.6 billion a year earlier. Around half of that figure came from smartphones, particularly iPhones, underscoring India’s growing role in global electronics supply chains.

During the same period, petroleum product exports fell by 16.4% to USD 30.6 billion from USD 36.6 billion a year earlier. At the current growth trajectory, electronics could overtake petroleum products as India’s second-largest export category by FY28.

Oil Exports Under Pressure

While electronics thrive, India’s oil-related exports are showing signs of strain. The global energy market has been reshaped by a combination of geopolitical tensions, trade sanctions, and shifting demand dynamics. Recent sanctions on Russian crude have disrupted India’s sourcing advantage, which had previously supported the country’s refining and re-export margins.

This is significant because petroleum exports have traditionally been one of India’s strongest contributors to the trade balance. With declining margins and tighter sourcing conditions, India will increasingly need to depend on growth in manufacturing and non-oil exports to maintain its trade momentum.

Changing Global Trade Dynamics

India’s export rebalancing comes at a time of heightened global trade uncertainty. Rising tariffs, regional trade realignments, and supply-chain diversification strategies by Western economies have created both challenges and opportunities.

While some traditional sectors face headwinds, India’s position as a reliable, cost-competitive manufacturing base for electronics, automotive components, and renewable energy products is becoming stronger.

The surge in electronics exports reflects global companies’ efforts to diversify supply chains away from China, with India emerging as a preferred alternative. Electronics have long been the largest export category for China, and India now aims to replicate that success by establishing itself as a global manufacturing powerhouse.

Key Takeaways for Businesses and Investors

• Policy support is paying off: PLI incentives, improved logistics, and digital infrastructure are enabling India to scale high-tech manufacturing.

• Energy trade volatility remains a risk: Dependence on oil exports could expose India to price swings and geopolitical disruptions.

• Diversification is essential: Building export strength across multiple sectors—electronics, renewable energy, pharma, and services—will enhance India’s economic resilience.

• Private-sector role is critical: Continuous investment in R&D, supply-chain localisation, and skill development will determine India’s global competitiveness.

• Timing matters: With electronics exports growing rapidly and oil exports contracting, the next two to three years are especially crucial for firms making strategic bets on manufacturing and exports.

The Road Ahead

India’s export transformation reflects a broader structural shift in its economy—from resource-based exports to technology-driven value creation. As global companies look to de-risk supply chains from China and relocate manufacturing hubs, India stands at a strategic inflection point—ready to become a major player in the global manufacturing ecosystem.

However, sustaining this momentum will require continued policy stability, energy security, and innovation-led growth. If managed well, the coming decade could redefine India’s export identity—from a buyer of crude to a supplier of chips, circuits, and high-value electronics.