Despite a weakening rupee that has put India in the bracket of Asian countries with the worst performing currency, the economy’s export numbers look impressive in the aggregate. However, a closer reading of the data reveals a far more uneven and structurally revealing story. When stripped of national aggregates, the data reveals a sharp divergence in performance across regions. A rigorous interrogation of the RBI Handbook of Statistics on Indian States 2024-25 reveals underlying structural dynamics.

The geography of India’s trade is becoming perilously lopsided as the export engine is being powered by a shrinking cluster of States. The top five exporters — Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Uttar Pradesh — now command nearly 70% of the national export basket. This creates a deceptive narrative where the national average masks a deepening regional crisis — where exports are becoming agglomerated rather than being dispersed across the nation. Firms are increasingly benefiting from spatial clustering, and not spreading out to newer regions.

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