NEW DELHI: India’s efforts to diversify export markets beyond the US and Europe are yielding strong growth across Africa and Asia, but a closer look at the trade data suggests that much of the recent surge is being driven by petroleum products rather than the manufacturing sectors targeted by the government’s export-promotion push.
The surge comes amid higher international petroleum prices following the outbreak of war in West Asia. While supply disruptions and changing trade flows have created opportunities for Indian refiners, higher prices have also inflated the value of exports raising questions about the durability of gains.
Exports to Africa rose 47% year on year in the first five months of FY2026-27, while shipments to the 10-nation Association of Southeast Asian Nations (ASEAN), a market that has remained difficult to penetrate despite a free trade agreement, grew 56% during April-August.
Shipments to Africa reached $26.19 billion in the first five months of the financial year, compared with $23.8 billion to the more prosperous ASEAN market. Africa’s share in India’s overall exports rose to 12.2% from 9.7% in the corresponding period last year.
The pattern is particularly striking in Tanzania and South Africa, two of India’s fastest-growing African markets. Tanzania’s imports from India jumped 122% year on year to $4.8 billion in April-September, while South Africa remained the continent’s largest customer, with purchases of $5.7 billion, up 51.8% from a year earlier.
Petroleum products accounted for around 72% of India’s exports to Tanzania. Shipments of these products surged 219% to $3 billion, making them the principal driver of the increase. In South Africa, petroleum products accounted for 46% of total Indian exports, with shipments rising 126% to $2.24 billion in April-August.
A similar pattern is visible in Southeast Asia, where Singapore has emerged as a major engine of export growth. India’s exports to the city-state increased 103% year on year to $16.7 billion in April-September. Petroleum-product exports to Singapore rose 142% to $4.51 billion in April-August, accounting for 48% of total shipments to the market.
Malaysia has also contributed to the region’s expansion. India’s exports there rose 74.5% to $4.34 billion in April-August, with petroleum products accounting for $1.37 billion, or nearly a third of shipments. Petroleum exports to Malaysia grew 117%.
Indonesia presents a somewhat different picture, with motor vehicles emerging as the leading growth driver rather than petroleum products.
The trend is not uniform across all non-traditional markets. India’s exports to North-East Asia, comprising China, Japan, South Korea and Hong Kong, rose 37% to $21.03 billion in April-September. Shipments to China increased 36% to $11 billion, led by telecom instruments, followed by consumer electronics and components.
The performance of markets covered by recently operational trade agreements also provides a useful counterpoint to the petroleum-led boom.
India’s exports to the UK rose 11.8% year on year to $7.32 billion in April-September, supported by electronics, gems and jewellery, and iron and steel. The increase has become more visible since July, when the India-UK Comprehensive Economic and Trade Agreement became operational.
With Oman, exports rose 47.6% to $3.28 billion in April-September. Shipments have grown by more than 100% year on year since the Comprehensive Economic Partnership Agreement became operational on June 1, with ships and boats, machinery and chemicals among the products driving growth.
These markets suggest that trade agreements and targeted export promotion can help expand shipments across a range of sectors.
Source; The Financial Express
