Analysing Sectorial Trade Dynamics in India: The Role of Domestic Manufacturing and Import Substitution in Reducing Trade Deficits (2015–2024)

This paper analyses sectorial trade dynamics of India. The period of study is from 2015 to 2024. The sectors that are considered for the analyses are electronics, pharmaceuticals and renewable energy sectors and the focus is to assess the role of import substitution and domestic manufacturing in addressing persistent trade deficits. The secondary time series data was collected from reliable sources like Ministry of Commerce, RBI and World Bank. The analyses reveal that there exists serious trade deficit situation in Electronics which averages around -$3191.05 million and in Renewable Energy which averages around -$373.29 million. This situation is accompanied by high import dependency of 74.84 per cent in Electronics and 89.33 per cent in Renewable Energy showing a heavy reliance on foreign components and volatile export growth. However the third sector i.e. the pharmaceutical sector consistently generate trade surpluses which averages around $1294.62 million and have low import dependency of 11.6 per cent which show cases export-driven resilience. The study mentions sector-specific strategies related to reducing deficits and fostering trade resilience keeping the pharmaceutical sector as a model for the sustainable development of the remaining two sectors.