India's finance minister reports that exports are increasing in an uncertain global market.

• Sitharaman delivered the government’s interim budget Thursday.
• The government's plan to increase spending on infrastructure will lead to a narrowing of the fiscal deficit from 5.8% in 2024 to 5.1% in 2025, as stated by her.
• The interim budget of India can be viewed as a "sketchy plan" of the full union budget that will be presented after the elections, according to the country's chief economic advisor.

Nirmala Sitharaman, India's Finance Minister, stated on Friday that despite the slowing global demand, the country's exports remained robust. She explained that economic concerns, including these issues, will be a major focus in the upcoming General Election.

Despite challenges in Europe, Sitharaman stated that India's exports have grown and are consistently on an upward trajectory.

Exports from India are expanding into new trade areas, including Brazil and parts of Africa.

India's digital public infrastructure was showcased at the G20 summit it hosted in New Delhi last year, which has sparked interest in newer areas of innovation and manufacturing, resulting in increased access to India for new people, as stated by Sitharaman.

Recent tensions in the Red Sea may reduce India's exports by $30 billion in the current financial year, according to reports. This would bring the total to $870 billion, down from $900 billion that was previously expected. Despite this, India remains a rare bright spot among G20 nations. No official figures are currently available.

In the upcoming quarter, India's General Election will take place, with Prime Minister Narendra Modi's government aiming to maintain its power for an unprecedented third consecutive term.

Sitharaman stated that if economic issues are to be the defining factor in the election, it would be the beneficiaries themselves who would come out and declare, "I am empowered now."

Our performance on economic issues, inclusive growth, and good economic outcomes will be crucial for us.

Fiscally prudent budget

The interim budget for 2025 was presented by Sitharaman, with the fiscal deficit forecasted to decrease from 5.8% to 5.1%, while the government highlighted its focus on increasing infrastructure spending.

In the fiscal year 2025, the interim budget predicts that capital expenditure will increase by 11.1% to 11.11 trillion Indian rupees ($133.9 billion), while tax revenue is expected to rise by 11.4% to 38.31 trillion rupees.

The fiscal year of India begins on April 1st and concludes on March 31st.

Sitharaman stated to CNBC that we have been cautious in our spending, ensuring that we get the most value for every rupee spent, while minimizing unnecessary expenditure.

During election years, the interim budget serves as a temporary financial plan to address immediate needs until a new government is established, and the full budget is released afterward.

The government's spending is being redirected towards newer areas such as energy, renewable energy, semiconductors, and minerals, as observed by Sitharaman.

Pranjul Bhandari, HSBC's chief economist for India and Indonesia, stated in a note that the government addressed the urgent requirement of reducing the fiscal deficit, despite the increasing state fiscal deficits, in order to ensure that India has sufficient resources to fund private sector capital expenditure in the long run.

India delivered a "no-compromise" budget, according to Bhandari, who found the fiscal math to be realistic.

Road to a $5 trillion economy

Earlier in the week, India's Finance Ministry stated that the country could achieve a gross domestic product of $5 trillion by 2027, making it the world's third-largest economy.

V. Anantha Nageswaran, the country's chief economic advisor, stated that India is expected to achieve a growth rate of 7% or more in the fiscal year 2024, with the government aiming to attain developed country status by 2047.

On Friday, CNBC's "Street Signs Asia" reported that Nageswaran stated that the broader aspects of the full union budget are likely to remain the same as the interim budget, which can be considered a "skeletal outline" of what is to come.

However, I would argue that the likelihood of meeting the growth and deficit targets for FY25 is high, given the buffers we have incorporated into our estimates.

— CNBC’s Naman Tandon and Charmaine Jacob contributed to this story.