India’s push to become a manufacturing powerhouse is beginning to bear fruits as certain segments in the country’s external trade basket have made their journeys into the positive territory of trade surplus.
Analysing the official data by the Ministry of Commerce and Industry reveals that between FY21 and FY26, five key industrial and manufacturing segments, spanning high-tech smartphones and telecommunications, precision engineering valves, defense munitions, railway and maintenance machinery, and critical graphite materials, reversed trade deficits to emerge as net export earners for the country.
This positive flip towards the trade surplus highlights not just India’s growing manufacturing heft but also brings in much-needed forex to the government coffers.
Here is a detailed analysis of the segments in the last five years:
Electric, telephony, and telecom equipment
As per the analysis, leading the charge in scale and speed is the electric, telephony, and telecom equipment category. In FY21, India spent ₹99,830 crore on imports while shipping out ₹31,365 crore, saddling the economy with a massive trade deficit of ₹68,464 crore.
The deficit narrowed to ₹51,245 crore in FY22 and shrank further to ₹25,788 crore in FY23. By FY24, the sector reached an inflection point, generating an initial trade surplus of ₹4,842 crore, which widened sharply to ₹53,319 crore in FY25.
In FY26, outward shipments jumped to ₹298,730.48 crore against imports of ₹192,138.82 crore, delivering a historic trade surplus of ₹106,591.66 crore.
Defence equipment
A similar transformation unfolded in strategic manufacturing, notably within firearms parts, ammunition, cartridges, and projectiles. India recorded imports of ₹421 crore and exports of ₹438 crore in FY21, before dipping into a trade deficit of ₹465 crore in FY22 as overseas procurement spiked.
However, domestic manufacturing quickly gained ground, turning the corner in FY23 with a trade surplus of ₹104 crore and expanding it to ₹334 crore in FY24. Surging global deliveries pushed the trade surplus to ₹2,846 crore in FY25.
In FY26, India capped this expansion with exports reaching ₹3,446.20 crore against imports of ₹581.36 crore, locking in a dominant trade surplus of ₹2,864.84 crore.
Notably, this period of surge has coincided with the government’s move to indigenise defence production in India by releasing the positive indigenisation list which was first released in August 2020.
Engineering goods
In core engineering goods, taps, cocks, valves, and boiler appliances steadily moved from a persistent deficit to an export driver. In FY21, imports of ₹10,118 crore outstripped exports of ₹9,913 crore, creating a trade deficit of ₹205 crore.
This gap expanded to a deficit of ₹750 crore in FY22 before paring down to ₹409.13 crore in FY23.
Robust export gains took over in FY24, driving a trade surplus of ₹1,220 crore that grew to ₹1,794 crore in FY25. By FY26, exports reached ₹25,121 crore compared to imports of ₹21,400 crore, leaving the sector with a positive trade surplus of about ₹3,721 crore.
Railway equipment
The railway machinery space, encompassing non-electric rail locomotives and track maintenance service vehicles, staged an equally coordinated turnaround.
In FY21, locomotive imports of ₹12.58 crore outpaced exports of ₹4.64 crore (deficit of ₹7.94 crore), while maintenance segment posted a deep deficit of ₹956 crore on imports of ₹978 crore and exports of ₹21 crore.
Similarly, locomotives swiftly flipped into the green, recording trade surpluses of ₹135 crore in FY22, ₹2 crore in FY23, ₹3 crore in FY24, and ₹352 crore in FY25.
Concurrently, maintenance vehicles saw their shortfall drop from deficits of ₹888 crore in FY22 and ₹958 crore in FY23 down to ₹212 crore in FY24 and ₹460 crore in FY25. By FY26, both lines operated in clear surplus: locomotive exports climbed to ₹1,142.83 crore against imports of ₹1.15 crore (surplus of ₹1,141.68 crore), while maintenance vehicles notched exports of ₹378 crore against imports of ₹198 crore (surplus of ₹179.59 crore), combining for an aggregate trade surplus of ₹1,321 crore.
Artificial and colloidal graphite
Critical industrial materials also contributed to this shift through artificial and colloidal graphite. In FY21, India spent ₹542 crore on imports while exporting ₹282 crore, leaving a trade deficit of ₹260 crore.
Growing industrial absorption widened the gap to trade deficits of ₹403 crore in FY22, ₹787 crore in FY23, ₹789 crore in FY24, and ₹565 crore in FY25. However, domestic processing capacities scaled rapidly toward the end of the period.
By FY26, exports vaulted to ₹1,901 crore against imports of ₹1,249 crore, reversing multi-year deficits into a net trade surplus of ₹652 crore.
