Key Highlights

• India recorded its highest-ever annual exports of US$863.10 billion in FY2025-26.

• Merchandise exports stood at US$441.80 billion, while services exports reached US$421.30 billion.

• Free Trade Agreements with the UAE, UK, and Australia improved global market access for Indian exporters.

• Engineering goods, pharmaceuticals, electronics, textiles, chemicals, and IT services were among the key growth drivers.

• Government initiatives such as Make in India, the PLI Scheme, and logistics improvements supported export growth.

• Higher exports strengthen foreign exchange reserves, create employment, and encourage industrial investment.

• India's diversified export base helped maintain growth despite global economic uncertainties.

India Achieves a Historic Export Milestone

India reached a major milestone in FY2025-26 by recording its highest-ever annual exports of US$863.10 billion. The achievement reflects the country's growing role in global trade and highlights the strength of both its manufacturing and services sectors.

The record performance was supported by merchandise exports of US$441.80 billion and services exports of US$421.30 billion. The balanced contribution from these two segments demonstrates how India has expanded beyond traditional exports and built a more diversified export economy.

This strong performance also reinforces India's position as one of the fastest-growing export-driven economies, despite challenging global economic conditions.

Merchandise and Services Exports Both Delivered Strong Growth

India's export growth was broad-based, with both goods and services contributing significantly.

Merchandise exports continued to benefit from rising global demand for engineering products, pharmaceuticals, electronics, textiles, chemicals, agricultural products, food processing items, auto components, gems and jewellery, and specialty manufacturing.

At the same time, services exports remained a key pillar of India's external trade. Strong international demand for information technology services, business process management, financial services, engineering consulting, research and development, cloud computing, digital transformation, artificial intelligence solutions, and Global Capability Centres (GCCs) supported steady growth.

The increasing contribution of services exports provides greater stability to India's overall export earnings, particularly during periods when global manufacturing demand slows.

Free Trade Agreements Opened New Growth Opportunities

One of the biggest contributors to India's export performance was the successful implementation of Free Trade Agreements (FTAs) with the United Arab Emirates (UAE), the United Kingdom (UK), and Australia.

These agreements reduced trade barriers by lowering tariffs, simplifying customs procedures, and improving market access for Indian businesses. As a result, exporters were able to improve their competitiveness and expand into new international markets.

Several industries benefited from these agreements, including engineering goods, pharmaceuticals, electronics, textiles, chemicals, food processing, agriculture, gems and jewellery, and automobile components.

The FTAs also strengthened India's services exports by creating new business opportunities for technology companies and professional service providers.

Government Policies Strengthened India's Export Competitiveness

Government initiatives have played an important role in supporting export growth over the past few years.

Programs such as Make in India and the Production Linked Incentive (PLI) Scheme encouraged domestic manufacturing and helped companies increase production capacity. Investments in logistics infrastructure, port modernization, digital customs clearance, and export promotion measures also improved the ease of doing business for exporters.

These structural reforms have enabled Indian manufacturers to integrate more effectively into global supply chains while improving the country's overall competitiveness in international markets.

Record Exports Deliver Broad Economic Benefits

Higher exports generate benefits across multiple sectors of the economy.

Rising export earnings increase foreign exchange inflows, strengthen the country's external balance, improve the current account position, and provide support to the Indian rupee.

Export growth also creates employment opportunities across manufacturing, logistics, warehousing, transportation, shipping, ports, aviation, and professional services. As international demand increases, businesses are encouraged to expand production capacity, invest in new technologies, and improve product quality.

Financial institutions also benefit through higher demand for trade finance, export credit, and foreign exchange services, while industrial parks and manufacturing clusters may attract additional domestic and foreign investments.

Several Industries Are Well Positioned to Benefit

The continued expansion of exports is expected to support several industries over the medium to long term.

Engineering companies, capital goods manufacturers, specialty chemical producers, pharmaceutical firms, electronics manufacturers, auto component suppliers, textile exporters, renewable energy equipment makers, and information technology companies are likely to benefit from sustained overseas demand.

At the same time, logistics providers, container operators, shipping companies, freight service providers, airports, and ports could witness higher business activity as trade volumes continue to grow.

The combination of manufacturing expansion and strong services exports creates a broader foundation for long-term economic growth.

India Demonstrated Resilience Despite Global Challenges

The record export performance becomes even more significant considering the uncertain global environment during the year.

Geopolitical tensions, supply chain disruptions, elevated global interest rates, and slower economic growth in several developed markets created challenges for international trade. Despite these headwinds, Indian exporters successfully diversified both their product offerings and export destinations.

The growing share of services exports also reduced India's dependence on merchandise trade alone, helping provide stability to export earnings during periods of weaker global manufacturing activity.

Outlook Remains Positive

India's export outlook remains encouraging as negotiations continue for additional Free Trade Agreements with several major economies.

Greater integration into global value chains, wider adoption of advanced manufacturing technologies, increased digitalisation of international trade, and continued policy support are expected to provide further momentum to exports.

However, sustaining long-term growth will require continued investment in infrastructure, logistics efficiency, workforce development, product quality, innovation, and expansion into high-value manufacturing sectors.

Strengthening these areas will help Indian businesses remain competitive while supporting the country's ambition of becoming a leading global manufacturing and services hub.

Conclusion

India's record exports of US$863.10 billion in FY2025-26 represent a significant milestone in the country's economic development. The achievement reflects the combined impact of stronger manufacturing capabilities, world-class services exports, supportive government policies, and successful Free Trade Agreements with key trading partners.

As India continues to improve its competitiveness and expand its presence in global markets, sustained export growth can strengthen economic resilience, generate employment, attract investment, and increase foreign exchange earnings. With continued policy reforms and infrastructure development, the country is well positioned to further enhance its role in global trade and move closer to its long-term goal of becoming a major global manufacturing and services powerhouse.