India’s Exports Reach Record $863.1 Billion in FY2025-26: Services, Manufacturing and FTAs Power Historic Growth
India has achieved a significant milestone in its economic journey by recording its highest-ever annual exports. According to the latest official figures, the country’s total exports of goods and services reached an unprecedented $863.10 billion during FY2025-26, highlighting the growing strength of the Indian economy despite global uncertainties.
The remarkable performance reflects India’s increasing competitiveness across international markets. While services exports continued to emerge as the country’s strongest pillar, merchandise exports also remained resilient despite weak global demand, supply chain disruptions, and geopolitical tensions. Strategic Free Trade Agreements (FTAs) with the United Arab Emirates (UAE), Australia, and the United Kingdom (UK) further enhanced India’s export opportunities and expanded market access.
The achievement underscores India’s growing role in global trade and strengthens its ambition of becoming one of the world’s leading export-driven economies.
Record-Breaking Export Performance
For the financial year 2025-26, India’s total exports stood at $863.10 billion, the highest ever recorded.
The export basket comprised:
- Merchandise exports: $441.80 billion
- Services exports: $421.30 billion
Together, these two sectors helped India register healthy overall export growth despite slowing economic activity in several developed economies.
The performance becomes even more impressive considering that international trade during the year faced numerous headwinds, including geopolitical conflicts, elevated freight costs, inflationary pressures, and slowing demand across several major markets.
Services Exports Continue to Lead
One of the biggest contributors to India’s record exports was the services sector.
Services exports crossed $421 billion, reflecting India’s growing leadership in knowledge-based industries. Indian companies continued to strengthen their presence across global markets by providing world-class services in technology, finance, consulting, engineering, healthcare, and digital solutions.
Major contributors included:
- Information Technology (IT) services
- Business Process Management (BPM)
- Financial services
- Engineering and consulting
- Professional services
- Global Capability Centres (GCCs)
India has established itself as one of the world’s largest providers of digital and technology services. Global corporations increasingly rely on Indian talent for software development, artificial intelligence, cybersecurity, cloud computing, analytics, and research operations.
The expansion of digital transformation projects worldwide also created fresh opportunities for Indian service providers.
Merchandise Exports Remain Resilient
While services exports grew rapidly, merchandise exports also demonstrated resilience.
Goods exports reached nearly $442 billion, supported by multiple sectors including:
Electronics
Electronics continued to be among India’s fastest-growing export segments. Government initiatives such as the Production Linked Incentive (PLI) scheme encouraged large-scale manufacturing, helping India become an important player in global electronics supply chains.
Engineering Goods
Engineering products remained one of India’s largest export categories. Machinery, automobiles, industrial equipment, and engineering components continued to find strong demand across international markets.
Pharmaceuticals
India retained its position as the “Pharmacy of the World.” Indian pharmaceutical companies exported affordable medicines and vaccines to countries across Asia, Africa, Europe, and the Americas.
Agriculture
Agricultural products including rice, spices, tea, coffee, fruits, vegetables, and marine products contributed significantly to export earnings despite climate-related challenges.
Together, these sectors helped merchandise exports maintain steady growth despite global economic uncertainties.
Free Trade Agreements Created New Opportunities
India’s Free Trade Agreements played an increasingly important role in expanding exports.
UAE CEPA
The Comprehensive Economic Partnership Agreement (CEPA) with the UAE reduced tariffs on numerous products and simplified customs procedures. Indian exporters benefited from improved access to one of the country’s largest trading partners.
Australia ECTA
The Economic Cooperation and Trade Agreement (ECTA) with Australia opened new opportunities for Indian exporters across textiles, engineering products, gems and jewellery, pharmaceuticals, and agricultural goods.
UK Trade Agreement
The India-UK trade agreement strengthened long-term trade prospects by improving market access across several sectors. Although implementation is progressing in phases, businesses have already begun preparing to capitalize on the expanded opportunities.
These agreements have made Indian exports more competitive by reducing trade barriers and improving ease of doing business.
Government Initiatives Supporting Export Growth
India’s export success has also been supported by several policy measures aimed at improving manufacturing competitiveness and boosting international trade.
Some major initiatives include:
- Production Linked Incentive (PLI) schemes
- Ease of Doing Business reforms
- Digital customs clearance systems
- Expansion of logistics infrastructure
- Dedicated Freight Corridors
- Port modernization
- Export promotion schemes
- Investment in manufacturing clusters
These measures have reduced logistics costs, improved efficiency, and encouraged greater participation by Indian businesses in global value chains.
Challenges Still Remain
Despite the record-breaking achievement, several challenges continue to affect India’s export sector.
Global demand remains uneven due to slower economic growth in many advanced economies. Geopolitical tensions continue to disrupt supply chains and increase transportation costs.
Additionally, India’s merchandise export growth remains relatively modest compared to the rapid expansion of services exports. Policymakers are therefore focusing on increasing manufacturing capacity, improving product quality, and enhancing global competitiveness.
Reducing logistics costs, simplifying regulations, and strengthening infrastructure will remain essential for sustaining long-term export growth.
India’s Long-Term Export Vision
The government has set ambitious targets for expanding India’s share in global trade.
India aims to become a major global manufacturing hub while simultaneously strengthening its dominance in services exports. Continued investments in electronics, semiconductors, renewable energy equipment, defence manufacturing, pharmaceuticals, textiles, and food processing are expected to generate additional export opportunities.
The country also plans to negotiate more Free Trade Agreements with strategic partners across Europe, Africa, and Latin America to diversify export markets.
If these efforts continue successfully, India could significantly increase its exports over the next decade while creating millions of new jobs across manufacturing and services sectors.
Why This Milestone Matters
Record exports are more than just an economic statistic—they reflect India’s growing integration with the global economy.
Higher exports generate foreign exchange earnings, strengthen the rupee, support industrial production, encourage investment, create employment, and improve overall economic growth.
The achievement also demonstrates that India is gradually moving beyond being primarily a domestic consumption-driven economy to becoming an increasingly important participant in global trade.
As manufacturing capabilities expand and digital services continue to flourish, India is well-positioned to emerge as one of the world’s leading export economies.
Conclusion
India’s record export performance of $863.10 billion in FY2025-26 marks a significant milestone in the country’s economic development. Strong services exports, resilient merchandise trade, strategic government policies, and Free Trade Agreements with the UAE, Australia, and the UK collectively contributed to this historic achievement.
While challenges such as global economic uncertainty and supply chain disruptions remain, India’s diversified export base and improving competitiveness provide a solid foundation for sustained growth. With continued policy support, infrastructure development, and expansion into new international markets, India appears well positioned to strengthen its role in global commerce and move closer to its long-term ambition of becoming one of the world’s leading export-driven economies.
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