Goods, services exports up 4.59 pc to USD 863.11 bn in FY26

India's combined goods and services exports rose 4.59% to an all-time high of USD 863.11 billion in FY2025–26, up from USD 825.26 billion in FY2024–25, accor...

What Happened

India's combined goods and services exports rose 4.59% to an all-time high of USD 863.11 billion in FY2025–26, up from USD 825.26 billion in FY2024–25, according to revised Commerce Ministry data.
Merchandise exports grew 0.93% to USD 441.78 billion (FY25: USD 437.70 billion), reflecting challenging global goods trade conditions including the impact of US tariff measures and softened demand in some key partner markets.
Services exports jumped 8.71% to USD 421.32 billion (FY25: USD 387.55 billion), driven by continued global demand for Indian IT, business process management, and professional services.
All four quarters of FY26 individually recorded their highest-ever export levels — a historic achievement for India.
The services export figure is now approaching parity with merchandise exports, marking a structural evolution in India's trade profile.

Static Topic Bridges

Foreign Trade Policy (FTP) — India's Export Framework

India's Foreign Trade Policy is formulated by the Ministry of Commerce and Industry and administered through the Directorate General of Foreign Trade (DGFT). The FTP 2023–28, released in March 2023, replaced the earlier FTP 2015–20 (which was extended multiple times due to COVID-19). FTP 2023–28 introduced an "Amrit Kaal" vision targeting USD 2 trillion in exports (goods and services combined) by 2030, shifting from an incentive-driven to a remission-based regime (RODTEP and RODTEP for services).

Governing policy: FTP 2023–28 (released March 31, 2023)
Nodal ministry: Ministry of Commerce and Industry
Implementing body: Directorate General of Foreign Trade (DGFT)
Key schemes: RoDTEP (Remission of Duties and Taxes on Exported Products), SEIS (Services Exports from India Scheme), Advance Authorization, Export Promotion Capital Goods (EPCG) scheme
Export target: USD 2 trillion by 2030 (goods + services combined)

Connection to this news: The USD 863 billion FY26 figure represents approximately 43% of the USD 2 trillion target for 2030 — putting the target within reach if double-digit growth rates are sustained, especially on the services side.

India's Trade Deficit and Current Account Dynamics

India's merchandise trade is structurally in deficit — India imports more goods (crude oil, gold, capital goods, electronics) than it exports. This merchandise trade deficit is the primary driver of India's current account deficit (CAD). However, the services surplus (India exports more services than it imports — IT, business services, travel) and large remittance inflows partially offset the goods deficit to determine the net CAD. The CAD is then financed through capital account inflows: FDI, FPI (portfolio investment), ECBs, and NRI deposits.

India's typical merchandise trade deficit: ~USD 250–280 billion per year (crude oil imports alone ~USD 120–150 billion)
Services surplus: India consistently runs a services surplus of ~USD 100–150 billion annually
Remittances: ~USD 120 billion in FY25 — India is the world's largest recipient
CAD threshold: Below 2.5% of GDP is considered sustainable; RBI targets this band
Financing: FDI (most stable), FPI (volatile), NRI deposits (interest-rate-sensitive)

Connection to this news: With services exports at USD 421 billion and growing strongly, India's structural current account vulnerability from crude oil-driven goods deficits is being progressively cushioned. This makes India's external sector more resilient to commodity price shocks.

Export Competitiveness — Key Policy Instruments

India uses multiple instruments to boost export competitiveness: (1) RoDTEP scheme — refunds embedded state and central taxes and duties not covered under existing schemes; (2) EPCG scheme — allows import of capital goods at zero/concessional customs duty against an export obligation; (3) Advance Authorization — allows duty-free import of raw materials used in export products; (4) Special Economic Zones (SEZs) and Export Oriented Units (EOUs) — provide tax concessions and single-window clearances for export-focused manufacturers; (5) District as Export Hub — identifies districts with export potential in specific products and links them to buyers and logistics.

RoDTEP: Replaced MEIS (Merchandise Exports from India Scheme) which was WTO-incompatible; implemented from January 2021
EPCG: Available for manufacturing and services exporters; export obligation = 6 times the duty saved
SEZs: Governed by SEZ Act 2005; provide duty-free imports, income tax exemptions, simplified procedures
Market access: India has FTAs with ASEAN, Japan, South Korea, UAE, Australia (in force); US FTA under negotiation

Connection to this news: The FY26 export record was achieved despite global headwinds — including US tariffs on several Indian product categories — indicating that India's export base has diversified sufficiently to absorb shocks in any single market or product category.

Key Facts & Data

Total FY26 exports: USD 863.11 billion (4.59% growth)
Merchandise exports FY26: USD 441.78 billion (0.93% growth)
Services exports FY26: USD 421.32 billion (8.71% growth)
Previous year FY25: Total USD 825.26 billion; Merchandise USD 437.70 billion; Services USD 387.55 billion
Record: All four quarters of FY26 individually set their highest-ever quarterly export records
Top merchandise exports: Petroleum products, engineering goods, electronics, pharmaceuticals, gems and jewellery, chemicals
Services drivers: IT and ITES, business process management, financial and professional services
Export target 2030: USD 2 trillion (FTP 2023–28)
Data source: Ministry of Commerce and Industry (revised data)
Data compilation: DGFT (goods); RBI and NASSCOM (services estimates)