India’s external trade performance in FY 2025–26 has shown steady and resilient growth, with total exports—covering both merchandise and services—reaching an estimated $860 billion. This marks a 4.22 percent increase compared to the previous fiscal year, underlining the country’s strengthening position in global trade despite ongoing geopolitical and economic uncertainties.
The latest export figures highlight a key structural shift in India’s trade dynamics, where services exports have emerged as the primary growth engine. While merchandise exports posted modest gains, robust performance in sectors such as IT services, consulting, and financial services significantly boosted overall export numbers. This development is crucial as it reinforces India’s reputation as a global services hub while also showcasing diversification in export destinations and sectors.
As policymakers and industry stakeholders assess these trends, the focus is now shifting toward sustaining export momentum amid global headwinds and enhancing competitiveness across sectors.
India’s total exports in FY26 rose to approximately Rs. 80.23 lakh crore, reflecting a balanced but cautious expansion in external trade. The growth was driven by a combination of steady global demand, diversified export markets, and strong performance in services.
Merchandise exports stood at around Rs. 41.21 lakh crore, registering marginal growth of just under 1 percent. This relatively subdued performance reflects global economic challenges, including supply chain disruptions and fluctuating commodity prices.
However, non-petroleum exports showed stronger resilience, growing by over 3.5 percent. This indicates diversification beyond traditional export categories and reduced dependence on oil-related trade.
On the other hand, services exports emerged as the standout performer. They surged to Rs. 39.02 lakh crore, marking a significant jump from the previous fiscal year. This growth underscores India’s expanding footprint in global services markets, particularly in IT, business process outsourcing, and digital services.
India’s export trajectory over recent years reflects a gradual recovery and transformation:
This progression highlights how India has transitioned from recovery to sustainable growth, with services playing a pivotal role.
A defining feature of FY26 export performance is the growing dominance of the services sector. India’s services exports not only expanded significantly but also contributed to a substantial trade surplus.
The services trade surplus rose sharply, reflecting higher global demand for Indian expertise in technology, finance, and professional services. This trend aligns with India’s long-term strategy of leveraging its skilled workforce and digital infrastructure to capture global market share.
According to a report published by the World Trade Organization global demand for digital and professional services is expected to continue rising, benefiting countries like India with strong service capabilities.
Several sectors contributed to export growth during the fiscal year:
These sectors demonstrate India’s diverse export basket and its ability to adapt to changing global demand patterns.
March 2026 data indicates a slight dip in monthly exports, with total exports estimated at $74.11 billion. Imports, however, stood higher at $76.55 billion, resulting in a modest trade deficit.
While the monthly numbers suggest short-term fluctuations, experts caution against overinterpreting these trends, as seasonal factors and global demand cycles often influence monthly trade data.
Despite this, the overall annual performance remains strong, supported by consistent growth in services and steady demand across key export sectors.
India’s export growth in FY26 was also driven by increased engagement with key international markets. Countries such as Singapore, Malaysia, China, Tanzania, and Sri Lanka recorded strong growth in imports from India.
This diversification is significant as it reduces dependence on traditional markets and enhances resilience against regional economic slowdowns.
According to data released by the Ministry of Commerce and Industry India’s export strategy increasingly focuses on strengthening trade ties with emerging economies and regional partners.
Experts at the International Monetary Fund note that emerging economies like India are expected to play a crucial role in global trade growth, particularly in services and digital exports.
They emphasize the importance of policy stability, infrastructure development, and trade agreements in sustaining export momentum.
The growth in exports has far-reaching implications for India’s economy. Increased export activity supports job creation, boosts foreign exchange reserves, and strengthens the country’s balance of payments.
Industries such as IT, manufacturing, logistics, and agriculture benefit directly from higher export demand. Additionally, the rise in services exports contributes to higher value addition and improved global competitiveness.
The export growth also complements government initiatives aimed at promoting manufacturing and boosting economic self-reliance.
Despite the positive outlook, several challenges remain. Global economic uncertainty, geopolitical tensions, and fluctuating commodity prices could impact export performance in the coming months.
Supply chain disruptions and protectionist trade policies in certain regions also pose risks to sustained growth.
Moreover, the relatively slow growth in merchandise exports highlights the need for structural reforms and increased competitiveness in manufacturing sectors.
Looking ahead, India’s export sector is expected to maintain steady growth, supported by strong fundamentals and policy initiatives.
Key focus areas for the future include:
The government’s continued emphasis on export promotion and ease of doing business is likely to play a crucial role in shaping the sector’s future.
Conclusion
India’s export performance in FY26 reflects a balanced and resilient growth trajectory. While merchandise exports faced challenges, the strong performance of the services sector has provided a significant boost to overall trade. As the global economic landscape continues to evolve, India’s ability to adapt, diversify, and innovate will be key to sustaining its position as a major player in international trade.