India's Exports to Spain and Germany Surge Amid Diversification Strategy

India’s exports to Spain and Germany register strong growth amid broader diversification strategy

India has reported strong export growth to Spain and Germany in the first seven months of the 2025–26 fiscal year, with recent government data highlighting these European partners as key markets in New Delhi’s ongoing strategy to diversify export destinations.

According to official figures cited in a government communication and subsequent media reports, India’s merchandise exports to Spain rose by approximately USD 3.81 billion in April–October 2025, representing a year-on-year increase of about 40.7 per cent.[1] Over the same period, exports to Germany expanded by 7.32 per cent compared with the corresponding months of the previous year, underscoring growing commercial engagement with Europe’s largest economy.[1]

This export performance is part of a wider pattern. A separate press note from the Ministry of Commerce and Industry recorded positive export growth to more than 100 countries during April–October 2025, including key markets in Europe, the Gulf region, East Asia and the Americas.[2] Spain and Germany were listed among the markets showing particularly strong momentum, supported by targeted export-promotion schemes and ongoing trade negotiations with the European Union.

Government data signal broad-based export gains

The Ministry of Commerce and Industry has underlined that the current export cycle is characterised by both geographic and sectoral expansion. In an official briefing on recent trade trends, officials noted that exports recorded positive growth in over 100 destination countries in April–October 2025 when compared with the same period a year earlier.[2]

Spain has emerged as one of the prominent beneficiaries of this shift. Government data shared with the media and cited in a national business daily indicate that Spain is becoming an “upcoming trading partner” for India across multiple sectors, with exports during April–October 2025 rising by USD 3.81 billion and registering growth of 40.74 per cent on a year-on-year basis.[1]

Germany has also seen an uptick in its imports from India. The same set of figures shows that Indian merchandise exports to Germany grew by 7.32 per cent in April–October 2025 compared to the corresponding period in the previous year, suggesting steady progress in what has long been a mature yet competitive market for Indian exporters.[1]

Officials have attributed these gains to a combination of factors, including stronger demand in select European markets, improved compliance with technical and quality standards, and targeted support measures such as export credit, market-linkage assistance and sector-specific promotion.

Export diversification as a policy priority

The recent performance in Spain and Germany is being viewed within the government as evidence of progress in its broader export diversification agenda. Over the last few years, New Delhi has sought to reduce concentration risk by expanding trade ties beyond a small group of traditional partners, particularly in the context of tariff-related disruptions in some major markets.

The Press Information Bureau, summarising the Ministry of Commerce and Industry’s assessment of April–October 2025 trade data, stated that India has recorded positive export growth across a wide spectrum of markets, “including key markets such as Germany, Spain, the United Arab Emirates, the United States, China, Hong Kong, South Korea, Brazil and Belgium.”[2]

During a briefing on export trends, a member of Parliament who was asked by the government to explain recent data to the media referred to Spain and Germany among a set of markets where Indian exporters had gained traction. He highlighted a decline in rejection rates for Indian consignments, linking this to quality-improvement efforts. According to this briefing, the rate of rejection of Indian exported products by importing countries fell by 12.5 per cent in June 2025 compared with June 2024, following various quality and standards initiatives.[1]

“India’s merchandise exports to countries like Spain, UAE, China, Hong Kong, USA, Germany, South Korea, Brazil and Belgium are showing strong growth,” the briefing noted, adding that quality upgrades and market-development schemes had contributed to this trend.[1]

These statements align with a series of export-promotion steps rolled out in recent years, including efforts to help firms comply with European regulatory standards and to develop sector-specific strategies in engineering goods, pharmaceuticals, textiles, chemicals, agro-products and information technology services.

Key schemes and policy measures supporting export growth

Recent export gains to Spain and Germany have been supported by a mix of long-standing and newer schemes administered by the Ministry of Commerce and Industry and allied departments. In the April–October 2025 performance review, officials and government briefings referenced several such initiatives.

One focus area has been engineering exports, which constitute a significant share of India’s shipments to European markets. According to the briefing detailing export-support measures, schemes such as **Zero Duty Export Promotion Capital Goods (EPCG)** and the **Market Access Initiative (MAI)** have helped keep engineering exports robust between April and October 2025.[1]

Under the Zero Duty EPCG scheme, exporters are allowed to import capital goods at zero customs duty against an export obligation, lowering their capital costs and enabling technology upgrades for global markets. The Market Access Initiative, in turn, provides financial assistance for activities such as trade fairs, buyer–seller meets, product display centres and market research in identified focus markets.

The government has also emphasised interventions to improve export quality, testing infrastructure and adherence to sanitary, phytosanitary and technical standards, which are critical for access to the European Union. The reported decline in rejection rates for Indian export consignments is being linked by officials to these measures, although detailed sector-wise data are yet to be fully disaggregated in the public domain.[1]

Beyond specific schemes, the wider export ecosystem has been affected by steps such as digitalisation of customs processes, expansion of logistics infrastructure under programmes like the PM Gati Shakti National Master Plan, and efforts to streamline documentation through the ICEGATE and other electronic platforms. While not all these steps are directly referenced in the latest export briefings, they form part of the enabling environment within which exporters to Spain, Germany and other destinations operate.

Parallel India–EU trade negotiations provide backdrop

The export surge to Spain and Germany has coincided with an intensive phase of negotiations on the proposed India–European Union free trade agreement, which covers market access for goods, services and investments.

According to a statement released by the Ministry of Commerce and Industry and reported by the press, EU negotiators were in New Delhi from 3 to 9 December 2025 to discuss core chapters of the India–EU FTA, including market access for goods and services, rules of origin, technical barriers to trade and trade and sustainable development.[1]

During this period, Commerce and Industry Minister Piyush Goyal held bilateral discussions in New Delhi with Maroš Šefčovič, the European Union’s Commissioner for Trade and Economic Security, on 8 and 9 December 2025. The Commerce Ministry described these talks as providing “strategic guidance” to the FTA negotiating teams as they sought to move towards an agreement at the earliest.[1]

“The discussions were aimed at providing strategic guidance to the free trade agreement negotiating teams as both sides work towards agreeing on the earliest,” the ministry stated, noting that the visit followed a week of technical discussions across key chapters of the proposed FTA.[1]

The Ministry further informed that these high-level engagements followed an earlier meeting in New Delhi on 7 December 2025 between the Commerce Secretary and the Director-General of Trade of the European Commission, reinforcing the institutional framework for the talks.[1]

These negotiations are taking place as the European Union consolidates its position as an important market for Indian goods, particularly at a time when exporters face tariff and non-tariff challenges in some other large destinations. Recent reports have noted that the EU is emerging as a significant market for Indian products amid steep tariff increases imposed by the United States on certain Indian exports, driving firms to deepen their engagement with European buyers.[1]

Spain’s evolving role in India’s trade profile

Spain’s emergence as a fast-growing export destination for India marks a notable shift in India’s commercial engagement with Southern Europe. While Spain has long imported Indian textiles, garments and certain agro-products, recent data suggest a broader range of goods contributing to the export expansion.

The government characterisation of Spain as an “upcoming trading partner” is grounded in the export growth recorded in April–October 2025, where the year-on-year increase of about 40.74 per cent represents one of the stronger performances among major European markets.[1]

While detailed sector-wise breakdowns for Spain in this period were not fully elaborated in the summary data released publicly, past trends indicate that Indian exports to Spain commonly include engineering goods, petroleum products, chemicals, pharmaceuticals, textiles and consumer goods. The support offered under schemes like Zero Duty EPCG and the Market Access Initiative, particularly for engineering and manufacturing exporters, appears to have indirectly benefitted shipments to Spain alongside other destinations.[1]

These gains come in a broader context of India–Spain economic engagement, which has historically included cooperation in areas such as renewable energy, infrastructure and transport. Earlier bilateral visits and agreements in previous years, as catalogued by government records, have laid a framework for business collaboration across sectors, although the current export surge is primarily being presented as a function of India’s wider diversification and export-promotion efforts.[3]

Germany remains a key anchor of India’s European trade

Germany continues to function as one of India’s most important economic partners in Europe, with merchandise trade spanning automobiles and auto components, machinery, electrical goods, chemicals, pharmaceuticals, textiles, information technology services and professional services.

The 7.32 per cent growth in Indian merchandise exports to Germany between April and October 2025, as reported in the latest government data, points to incremental gains in a developed and technologically intensive market that often demands higher levels of compliance with technical and safety standards.[1]

Germany is also a major source of technology, capital goods and investment flows into India. Previous bilateral documents available with the Press Information Bureau refer to cooperation in areas such as manufacturing, clean energy, urban development and vocational training.[3] While the current export gains are reported primarily in aggregate rather than sector-specific terms, they sit alongside ongoing joint initiatives to deepen industrial and technological collaboration.

From an administrative perspective, the German market has driven Indian regulators and exporters to pay careful attention to technical barriers to trade and quality benchmarks. This experience is relevant for India’s broader efforts to align with EU-wide regulations and standards, which in turn shape access to markets across the 27-member bloc, including both Spain and Germany.

Administrative and regulatory implications

The export growth to Spain and Germany carries several administrative implications for trade and regulatory authorities in India. As exporters expand their presence in these markets, agencies involved in trade facilitation, standards, testing and certification are likely to face increased demand for services aligned with European Union requirements.

Key areas of administrative focus include the following.

• Strengthening of testing and certification infrastructure to align with EU norms on product safety, environmental standards and technical specifications, particularly in sectors such as engineering goods, electronics, textiles, chemicals and food products.
• Further streamlining of customs processes, documentation and risk management systems to ensure timely shipment clearances and predictability for exporters targeting time-sensitive European supply chains.
• Capacity-building initiatives for small and medium enterprises on rules of origin, technical barriers to trade and sustainability requirements that are expected to feature prominently in the proposed India–EU FTA.
• Enhanced data collection and dissemination on market opportunities and regulatory changes in Spain and Germany, to support firms seeking to diversify away from more traditional markets.

The fall in rejection rates for Indian export consignments, as cited in the government briefing, illustrates how regulatory and quality-upgradation measures can directly affect exporters’ access to advanced markets.[1] Maintaining this trajectory will require continued coordination between central ministries, export-promotion councils, standards bodies and state-level agencies.

Impact on exporters and sectoral stakeholders

For exporters, the recent trade data underline the importance of Spain and Germany as part of a diversified European portfolio. Firms in engineering, textiles, chemicals, pharmaceuticals, processed food, auto components and information technology-enabled services are among those expected to benefit from sustained access to these markets.

The administrative and policy environment suggests several potential practical impacts.

• Exporters may find expanded opportunities to participate in supply chains serving European manufacturing, retail and infrastructure sectors, particularly if the India–EU FTA progresses and reduces tariff and non-tariff barriers.
• Firms that leverage schemes such as Zero Duty EPCG and MAI can continue to upgrade technology, participate in fairs and buyer–seller meets in Spain and Germany, and undertake targeted marketing activities funded partly through these mechanisms.[1]
• Compliance with EU standards on sustainability and environmental performance is likely to gain prominence, especially under chapters on trade and sustainable development in the proposed FTA, prompting exporters to invest in cleaner technologies and traceability systems.
• Logistics providers, ports and related service sectors could see rising volumes linked to Europe-bound consignments, reinforcing the case for continued investment in multimodal connectivity and port modernisation.

In parallel, export-promotion councils and industry associations may intensify their engagement with counterparts in Spain and Germany to identify specific product niches, opportunities in services trade and avenues for joint ventures or technology partnerships.

Linkages with broader economic and foreign trade strategy

The export gains to Spain and Germany are occurring against the backdrop of a broader economic context marked by efforts to enhance manufacturing competitiveness, attract investment and strengthen integration into global value chains.

Recent analytical coverage of India’s trade diversification has noted that, amid evolving global trade patterns and sanctions or tariff-related changes involving major economies, New Delhi has been seeking to expand its export footprint in Europe, West Asia, Africa, Latin America and parts of Asia beyond its traditional partners.[10][5] The export performance in Spain and Germany aligns with this trajectory, offering concrete evidence of improved access in at least two significant European markets.

At the same time, the simultaneous pursuit of an India–EU free trade agreement, other bilateral trade arrangements and domestic reforms such as the Production-Linked Incentive schemes, logistics upgrades and ease-of-doing-business measures suggests a multi-layered approach to export-led growth. While the latest export data are still partial and subject to revision, they provide policymakers with feedback on the effectiveness of these overlapping initiatives.

Data transparency and future monitoring

Going forward, detailed disaggregated data on exports to Spain and Germany by sector, firm size and state of origin will be important to fully assess the depth and sustainability of this growth phase. At present, publicly reported figures emphasise aggregate export values and percentage changes over April–October 2025, without a comprehensive breakdown at the product level.

The Directorate General of Foreign Trade, the Department of Commerce and statistical agencies are expected to continue releasing periodic updates on country-wise export performance in their regular bulletins. As India enters subsequent quarters of the 2025–26 fiscal year, analysts and sector stakeholders will monitor whether the strong growth to Spain is sustained beyond the current base effect and whether exports to Germany continue their upward trend in a potentially more competitive environment.

For administrative agencies, regular monitoring and transparent reporting of such data will support evidence-based adjustments to export-promotion schemes, quality initiatives and market-development strategies, ensuring that the gains achieved in Spain, Germany and other emerging markets are consolidated over the medium term.