The silent supercycle

India’s export story is evolving from low-cost economies towards sophistication. Having reached US$821 bn in FY25, almost twice the level of a decade ago, the country is now transitioning beyond its services-led roots toward a new phase centred on advanced manufacturing, digital capabilities, and supply-chain depth. 

By 2028, exports are expected to climb to US$1.7 tn, marking one of the fastest expansions among major economies.

With rising geopolitical bifurcation, multinational firms are accelerating “China+1” diversification. Moreover, India’s digital infrastructure (spanning payments, logistics, and e-commerce) amplifies export efficiency. 

According to KPMG, a 1% rise in domestic digital connectivity increases international trade by about 1.5%, and the country’s Indo-Pacific trade corridors now account for nearly a fifth of global digital trade.

Structural Drivers of India’s Export Growth

• Manufacturing ascent and policy tailwinds                     
  
  India is rapidly expanding its manufacturing base under the “Make in India” and “Atmanirbhar Bharat” initiatives. The sector’s GDP contribution is projected to rise from 16% to 21% by 2031, with manufacturing exports set to double over the same period. Targeted production-linked incentives (PLIs) and US$10 bn earmarked for semiconductor fabrication underscore the government’s resolve to build deep industrial capacity and reduce import dependency.
  
  

• Technology and talent advantage                                         
  
  One-third of the world’s STEM graduates are Indian, feeding innovation across electric vehicles, advanced engineering, and pharmaceuticals. Engineering, research, and development (ER&D) exports could triple from US$45 bn today to US$130–170 bn by 2030, positioning India as a global hub for digital manufacturing and design outsourcing.
  
  

• Rising investment and supply-chain strength                     
  
  With infrastructure spending targeted at US$1.8 tn by 2025, India is reinforcing logistics, energy, and port connectivity. This backbone supports export competitiveness by lowering costs and improving reliability.

Export Diversification: Broadening the Growth Base

India’s export expansion is not just a story of scale, but also one of diversification. The country now exports to nearly 200 countries, with the top ten destinations, led by the U.S., UAE, and the Netherlands, comprising just over half of total exports. 

What’s striking is the rise of non-traditional markets: exports to Africa, Latin America, and West Asia are growing at double- and triple-digit rates as India deepens trade relationships and negotiates new free-trade agreements.

This diversification serves two critical functions.

• First, it cushions India against external shocks such as Western tariff regimes or regional slowdowns, making export growth more durable and cyclical resilient.

• Second, it broadens the product mix – from low-margin commodities to high-value goods such as electronics, specialty chemicals, and engineered components. In effect, India is not only selling to more markets but selling smarter: capturing higher value per unit of export while aligning with global trends in sustainability, digitalisation, and clean manufacturing. In essence, India is seeking to move up the value-chain through greater “complexity” in its exports.

Investing in the Export Story: A Case for Active Management

For equity investors, India’s export expansion demands a portfolio rethink. The MSCI India Index remains heavily weighted toward domestic-consumption names such as financials, energy and staples, while the most dynamic export stories lie beyond these benchmark giants. Active managers can participate in the export narrative by focusing on lesser-represented companies shaping India’s next phase of export growth:

• Samvardhana Motherson (Auto and ancillaries)                 
  
  With operations spanning 40 countries, Motherson has evolved from a domestic parts supplier into one of the world’s top automotive component manufacturers. 
  
  

• Aurobindo Pharma (Pharmaceuticals)                                  
  
  Among the world’s largest generic drug exporters, Aurobindo’s rising share of complex formulations in regulated markets positions it at the high-value end of India’s pharma chain.
  
  

• UPL (Chemicals)                                                                       
  
  As the world’s fifth-largest agrochemical player, UPL exemplifies India’s ability to scale globally competitive chemical manufacturing while expanding into sustainable crop-protection and bio-solutions.
  
  

India’s export resurgence marks a long-term opportunity built on competitiveness, digital strength, and diversification. 

For investors looking to benefit from this structural shift, active management within a specific India Fund or ETF allows focused exposure to the companies leading India’s export growth.

This is not a passive story; the next leg of returns will accrue to investors willing to look beyond index heavyweights, toward high-conviction businesses driving India’s outward transformation.