North America, NE Asia, Latin America account for over 35 pc of India's exports in FY26

India's merchandise exports reached USD 441.78 billion in FY2025-26, registering modest growth of approximately 0.93% year-on-year. North America, North-East...

What Happened

India's merchandise exports reached USD 441.78 billion in FY2025-26, registering modest growth of approximately 0.93% year-on-year.
North America, North-East Asia, and Latin America together accounted for over 35% of India's total merchandise exports, reflecting a geographic broadening of export markets.
North America remained India's single largest export destination with USD 97.7 billion (22.1% of total), though growth was subdued at 1.3% year-on-year.
North-East Asia recorded a significant surge of 21.6% year-on-year — the strongest regional growth — driven by electronics and engineering goods demand.
Exports grew meaningfully across Asia, Africa, and Latin America, signalling continued penetration of non-traditional markets.
Indian exporters penetrated 1,821 new principal commodity-country product combinations during the year.
Advanced engineering and industrial sectors contributed the highest value among all export categories.

Static Topic Bridges

India's Foreign Trade Policy (FTP) 2023–2030 and the USD 2 Trillion Export Target

India's trade strategy is anchored in the Foreign Trade Policy 2023 (FTP 2023), released by the Directorate General of Foreign Trade (DGFT) on March 31, 2023.

FTP 2023 sets a target of USD 2 trillion in total exports (goods + services combined) by 2030, up from approximately USD 765 billion in FY2022-23.
Unlike earlier five-year FTPs, FTP 2023 has no fixed end date — it is a dynamic policy, to be revised as required.
Key pillars: Remission and entitlement-based regime (replacing direct export incentives), e-commerce export promotion (target: USD 200–300 billion by 2030), focus on emerging markets, and rupee internationalisation in trade settlement.
At FY26 merchandise exports of USD 441.78 billion and total exports (goods + services) approaching USD 860 billion, India is broadly on track relative to the 2030 trajectory, though acceleration is needed.

Connection to this news: The FY26 export data — particularly the diversification into Latin America, Africa, and North-East Asia, and the penetration of 1,821 new product-country combinations — directly reflects FTP 2023's strategic intent to broaden India's trade footprint beyond traditional US and EU markets.

Directorate General of Foreign Trade (DGFT) — Institutional Role

The DGFT is the nodal agency for trade policy implementation and data reporting in India.

The DGFT functions under the Ministry of Commerce and Industry.
It is responsible for administering the Foreign Trade (Development and Regulation) Act, 1992, which is the principal statute governing India's foreign trade.
The DGFT issues Importer Exporter Codes (IECs), administers export promotion schemes, and publishes trade data.
Trade Notices, Policy Circulars, and the Annual Foreign Trade Statistics report are published by the DGFT.
The DGFT also administers the Advance Authorisation Scheme, Export Promotion Capital Goods (EPCG) scheme, and Remission of Duties and Taxes on Exported Products (RoDTEP) — key instruments for export competitiveness.

Connection to this news: The regional and sectoral export data cited in the news originates from DGFT/Ministry of Commerce analysis. The 1,821 new product-country penetrations metric reflects DGFT's trade diversification mandate under FTP 2023.

India's Export Composition — Key Sectors

Understanding what India exports is essential for contextualising the FY26 performance.

Engineering goods (machinery, iron and steel, transport equipment): Consistently India's largest export category by value; a major driver of North-East Asia surge.
Petroleum products: Refined petroleum is a key export (India as a refining hub for Gulf crude); sensitive to global oil price volatility.
Gems and jewellery: Historically significant; faces competition and is affected by domestic gold import policy changes.
Chemicals and pharmaceuticals: Generic pharmaceuticals are a strategic export; India is the world's pharmacy for generics.
Electronic goods: Benefiting from the Production Linked Incentive (PLI) scheme for electronics, notably mobile phones (iPhone assembly for export).
Textiles and apparel: A traditional export; underperforming relative to Bangladesh and Vietnam in recent years.

Connection to this news: Advanced engineering and industrial sectors topping the FY26 value contribution reflects the ongoing structural shift in India's export basket from primary/labour-intensive goods to higher-value manufactured products.

Production Linked Incentive (PLI) Scheme — Catalysing Export Growth

The PLI scheme is a key supply-side intervention directly linked to India's export competitiveness, particularly in sectors contributing to the North-East Asia growth story.

Launched in 2020–21, the PLI scheme covers 14 sectors including mobile phones/electronics, pharmaceuticals, medical devices, automobiles and auto components, food processing, and advanced chemistry cells.
The scheme offers financial incentives (4–6% of incremental sales) to domestic manufacturers to scale up production.
Electronics PLI: India's mobile phone exports grew from near-zero to over USD 15 billion within three years under PLI, driven largely by assembly operations serving global export markets.
Pharmaceuticals PLI: Aimed at reducing API (active pharmaceutical ingredient) import dependence from China while boosting generic drug exports.
The PLI scheme is aligned with China-plus-one supply chain diversification trends, with global manufacturers seeking alternative manufacturing bases.

Connection to this news: North-East Asia's 21.6% export surge is partly attributable to India supplying electronics components and finished goods into regional value chains — a direct PLI outcome. The "advanced engineering and industrial sectors" topping FY26 export value also reflects PLI's structural impact.

Current Account and Trade Deficit Context

Merchandise export performance cannot be read in isolation from India's import bill and current account position.

India's total exports (goods + services) in FY26 rose 4.22% to approximately USD 860.09 billion; imports rose faster at 6.47%, reaching USD 979.40 billion — widening the trade deficit.
The merchandise trade deficit for FY26 was approximately USD 223 billion.
India's services surplus (led by IT, GCCs, and business process services) stood at over USD 134 billion, providing a significant offset to the merchandise deficit.
Current Account Deficit (CAD) is projected at 2.4–2.5% of GDP for portions of FY26, driven by the merchandise deficit, gold imports, and energy import costs.

Connection to this news: Despite record merchandise export achievements, the import bill's faster growth underscores why trade diversification and PLI-driven import substitution are twin priorities in India's economic strategy.

Key Facts & Data

India merchandise exports FY2025-26: USD 441.78 billion.
Year-on-year growth: ~0.93%.
North America share: USD 97.7 billion (22.1% of total); growth 1.3% YoY.
North-East Asia growth: 21.6% YoY — fastest regional growth.
North America + North-East Asia + Latin America combined: Over 35% of total merchandise exports.
New product-country combinations penetrated: 1,821.
Top value sector: Advanced engineering and industrial goods.
India total exports (goods + services) FY26: ~USD 860.09 billion (4.22% growth).
FTP 2023–2030 target: USD 2 trillion (goods + services combined).
FTP 2023 release date: March 31, 2023 (effective April 1, 2023).
PLI scheme coverage: 14 sectors; mobile phone exports from near-zero to over USD 15 billion.
Nodal trade policy agency: DGFT (under Ministry of Commerce and Industry).
Governing statute: Foreign Trade (Development and Regulation) Act, 1992.