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Economics May 06, 2026 3 min read Daily brief · #25 of 30

India's overall exports hit all-time high of $863 billion in FY26

India's combined goods and services exports reached an all-time high of $863.11 billion in FY2025-26, rising 4.6% from $825.26 billion in FY2024-25. Services...

GS Paper 3 (Indian Economy Foreign Trade)

What Happened

  • India's combined goods and services exports reached an all-time high of $863.11 billion in FY2025-26, rising 4.6% from $825.26 billion in FY2024-25.
  • Services exports surged 8.71% to $421.32 billion, overtaking the $387.55 billion recorded in FY2024-25 and crossing the $400-billion mark for the first time.
  • Merchandise (goods) exports grew modestly by 0.93% to $441.78 billion, up from $437.70 billion in FY2024-25.
  • Overall imports grew at a faster pace of 6.47%, widening India's combined trade deficit (goods and services) to approximately $119.30 billion from $94.66 billion in FY2024-25.
  • The achievement came despite significant global headwinds including US tariff actions, supply-chain disruptions, and weaker consumption in major trading partners.

Static Topic Bridges

Balance of Payments and the Current Account

India's Balance of Payments (BoP) is a systematic account of all economic transactions between Indian residents and the rest of the world over a given period. It has two main components: the Current Account and the Capital and Financial Account. The Current Account records trade in goods (merchandise), trade in services (invisibles), income flows, and unilateral transfers such as remittances.

India has traditionally run a current account deficit (CAD) — it imports more goods than it exports, and the merchandise trade deficit is large. However, the services surplus (particularly from IT and IT-enabled services, financial services, and professional services) and large inward remittances have historically compressed the CAD. A widening trade deficit, when not offset by the services surplus or remittances, puts pressure on the rupee and the country's external sector stability.

  • The Current Account is recorded by the Reserve Bank of India (RBI) in its Balance of Payments data.
  • Services trade is classified under "invisibles" in the BoP — it includes software exports, tourism receipts, transport, and business services.
  • India is one of the world's top recipients of remittances, which form another major invisible credit.
  • A current account deficit above 3% of GDP is generally considered a stress threshold for India.

Connection to this news: Services exports crossing $421 billion — representing nearly 49% of total exports — strengthens India's services surplus and helps moderate the current account deficit even as the merchandise trade gap widens. This makes the services sector a critical buffer for India's external account health.

India's Foreign Trade Policy and Export Promotion Architecture

India's foreign trade policy is governed by the Foreign Trade (Development and Regulation) Act, 1992, and implemented through periodic Foreign Trade Policies (FTPs) issued by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry. The FTP 2023 (valid until 2028) emphasises export diversification, market access, and reducing trade costs through schemes like the Remission of Duties and Taxes on Exported Products (RoDTEP).

India's key export-promotion mechanisms include: RoDTEP (replacing the older MEIS), Production Linked Incentive (PLI) schemes targeting manufacturing exports, Special Economic Zones (SEZs), and export credit facilities. Services exports are supported through Export of Services from India (SEIS) and the Technology Export Promotion Framework.

  • Foreign Trade Policy 2023 set a target of $2 trillion in total exports (goods and services) by 2030.
  • RoDTEP replaced Merchandise Exports from India Scheme (MEIS) following WTO dispute rulings against export subsidies.
  • PLI schemes cover 14 sectors and aim to make India a global manufacturing hub.
  • Services exports are led by: software services (IT/ITeS), professional and management consulting, and financial services.

Connection to this news: The record FY26 exports validate the structural shift in India's export basket towards high-value services, and reflect the combined impact of PLI-driven manufacturing push and the organic growth of India's digital and services economy.

Key Facts & Data

  • Total exports (goods + services) FY26: $863.11 billion (up 4.6% YoY)
  • Services exports FY26: $421.32 billion (up 8.71% YoY) — all-time high
  • Merchandise exports FY26: $441.78 billion (up 0.93% YoY)
  • FY25 total exports for comparison: $825.26 billion
  • Combined trade deficit (goods + services) FY26: approximately $119.30 billion (wider than $94.66 billion in FY25)
  • Overall imports grew at 6.47% in FY26
  • Foreign Trade Policy 2023 target: $2 trillion in total exports by 2030
  • Services now account for approximately 49% of India's total exports
On this page
  1. What Happened
  2. Static Topic Bridges
  3. Balance of Payments and the Current Account
  4. India's Foreign Trade Policy and Export Promotion Architecture
  5. Key Facts & Data
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