India's Trade Policy Shifts Under Commerce Minister Piyush Goyal: Implications for Foreign Investors in Manufacturing and Export Sectors

India's trade policy landscape has undergone a transformative shift under Commerce Minister Piyush Goyal, with a clear focus on boosting exports, attracting foreign direct investment (FDI), and repositioning the country as a global manufacturing powerhouse. These reforms, spanning from 2023 to 2025, have already begun to reshape India's economic trajectory, offering foreign investors a compelling case for participation in its high-growth sectors.

A Strategic Push for Exports and Global Market Access

Goyal's administration has prioritized expanding India's export footprint through a combination of policy overhauls and strategic trade agreements. The revised Foreign Trade Policy (FTP) of 2023 aims to elevate exports to $2 trillion by 2030, supported by streamlined procedures and digital tools like the Trade Connect ePlatformForeign Trade Policy of India - IBEF^[1]. This ambition is underpinned by India's record $824.9 billion in exports for FY25, with a projected 6% growth in FY26 despite global trade headwindsExports to rise 6% this year, will end year on positive note: Goyal^[4].

A cornerstone of this strategy has been the rapid negotiation of Free Trade Agreements (FTAs). The India-UAE FTA, finalized in 88 days, has already catalyzed trade growth, while the India-UK FTA, signed in July 2025, targets $120 billion in bilateral trade by 2030Foreign Trade Policy of India - IBEF^[1]. Negotiations with the EU are expected to conclude by year-end, and discussions with the U.S. are gaining momentumIndia's trade policies: How the country is positioning itself^[3]. These agreements are particularly advantageous for Indian exporters in textiles, pharmaceuticals, and electronics, sectors where India has demonstrated competitive strengthsForeign Trade Policy of India - IBEF^[1].

Manufacturing and FDI: A Dual Engine for Growth

Foreign investors are increasingly drawn to India's manufacturing sector, bolstered by the Production Linked Incentive (PLI) scheme and liberalized FDI policies. The PLI, covering 14 sectors including electronics, pharmaceuticals, and automobiles, has attracted over $1.76 billion in investments as of 2025, with projected total inflows exceeding $2 billionPiyush Goyal reviews PLI scheme, emphasises need for self^[5]. For instance, the electronics PLI—approved in April 2025 with a $2.7 billion allocation—targets critical components like printed circuit boards and lithium-ion cells, aiming to reduce import dependency and create 91,600 direct jobsForeign Trade Policy of India - IBEF^[1].

FDI inflows into India's manufacturing sector have surged, reaching $19.04 billion in FY24-25, a 18% increase from the previous yearPiyush Goyal reviews PLI scheme, emphasises need for self^[5]. This growth is supported by regulatory reforms such as the Jan Vishwas (Trust-based Governance) Bill, 2023, which simplifies compliance, and the liberalization of FDI in sectors like space exploration (100% FDI allowed in satellite manufacturing)Foreign Trade Policy of India - IBEF^[1]. Notably, Foxconn's $1.5 billion investment in India—part of Apple's production diversification strategy—highlights the sector's appealForeign Direct Investment in India | FDI Trends^[2].

Sector-Specific Opportunities

Electronics and Automotive: India's electronics exports soared 47% in Q1 FY26, driven by U.S., UAE, and Chinese demandForeign Trade Policy of India - IBEF^[1]. The automotive sector, too, is thriving, with exports rising 22% YoY in Q1 FY26. The government's “Districts as Export Hubs” initiative, partnering with e-commerce platforms, further amplifies this growthForeign Trade Policy of India - IBEF^[1].

Pharmaceuticals: India has emerged as a net exporter of bulk drugs, producing critical compounds like Penicillin G domestically. By August 2024, 50% of pharmaceutical production was exported, with MNCs collaborating to enhance technology and quality systemsForeign Trade Policy of India - IBEF^[1].

Emerging Industries: Policy incentives for semiconductors, green hydrogen, and EVs are positioning India as a hub for next-generation manufacturing. For example, 100% FDI is now permitted in EV component manufacturing, aligning with global decarbonization trendsIndia's trade policies: How the country is positioning itself^[3].

Digitalization and Institutional Efficiency

India's trade ecosystem is being modernized through digital tools. The Trade Connect ePlatform, launched in 2024, digitizes export processes, reducing bureaucratic delaysForeign Trade Policy of India - IBEF^[1]. Coupled with GST reforms and Special Economic Zone (SEZ) upgrades, these measures enhance operational efficiency for foreign investors.

Risks and Considerations

While the outlook is optimistic, challenges remain. Infrastructure bottlenecks and regulatory fragmentation in some states could hinder scalability. Additionally, global economic uncertainties, such as U.S. tariffs on Indian goods, necessitate agile policy responsesExports to rise 6% this year, will end year on positive note: Goyal^[4].

Conclusion: A Prime Destination for Strategic Investment

India's trade policy shifts under Piyush Goyal have created a fertile ground for foreign investors. With a historically low unemployment rate of 5.1%, a $42.1 billion FDI inflow in April-September 2025, and a clear roadmap to a $30 trillion-plus economy by 2030Foreign Direct Investment in India | FDI Trends^[2]Exports to rise 6% this year, will end year on positive note: Goyal^[4], the country is no longer just an emerging market—it is a strategic linchpin in global supply chains. For investors, the imperative is clear: engage early in sectors where India's policy tailwinds and demographic dividend converge.