Trade powerhouse Gujarat's record slips over petroleum product exports

Relying on the volatile sector has caused the state's share of national exports to slide

Gujarat climbed the ranks to become India’s third-best “export-prepared state”, after Maharashtra and Tamil Nadu, according to a NITI Aayog report for 2024. But Gujarat’s improved readiness faces a challenge: a two-year decline in exports starting in FY24.

 

Maharashtra was the country’s leading export state until FY20, with Gujarat ranking second; however, starting in FY21, these positions flipped. In FY22, Gujarat’s exports more than doubled to $124.41 billion — up from $60.59 billion the previous year — driven largely by a surge in petroleum product shipments.

 

Exports from Gujarat peaked at $146.49 billion in FY23 and then declined by more than 20 per cent in FY23-FY25. In FY26 (Apr-Oct), Gujarat exported goods worth $65.66 billion, down almost 10 per cent from the previous year.

 

Consequently, Gujarat’s share in India’s total exports has dropped from the peak of 32.74 per cent in FY23 to 25.88 per cent in the first seven months of FY26. 

 

A heavy concentration in petroleum products — where Gujarat claimed nearly 80 per cent of India’s $63.34 billion petroleum products’ exports in FY25 — has caused the state’s overall share in national exports to slip.

 

The dip occurred even before US President Donald Trump levied additional tariffs on the purchase of Russian crude oil, a major input to keep Gujarat’s crude oil refineries running.

 

Petroleum products comprised more than 37 per cent of all exports from Gujarat in FY25 and FY26 (Apr-Oct) and the share touched 49 per cent in FY23 (the year when the state’s exports peaked).

 

From FY22 to FY25, Gujarat’s non-petroleum exports remained flat between $72 billion and $75 billion, while petroleum exports fluctuated considerably. Total exports from Gujarat fell by $30.16 billion from FY23 to FY25. Petroleum product exports fell by $27.98 billion, largely explaining the decline in the overall export value.

 

Dependence on the petroleum sector skews one’s export performance when global energy prices are volatile, explaining Gujarat’s status in recent years. Trump’s additional tariffs on the purchase of Russian crude are likely to further hamper Gujarat’s export prospects, if the state’s non-petroleum exports don’t pick up. 

 

Maharashtra, too, has seen a small but consistent decline in its exports — from $72.86 billion in FY22 to $65.86 billion in FY25. Tamil Nadu, Karnataka and Uttar Pradesh, which are the next best states (in terms of export value), have increased their share in India’s total exports in recent years.

 

Tamil Nadu’s share increased from 9.8 per cent in FY18 to almost 13 per cent in the first seven months of FY26. Karnataka’s share improved from 5.95 per cent in FY18 to 8.11 per cent in FY26 (Apr-Oct). The top five states contribute almost two-thirds of India’s total exports, explaining the concentrated nature of India’s export basket. 

 

The roadmap is clear: Gujarat has to improve its exports of products whose global demand-supply and price dynamics are relatively stable.