India's Export Set to Reach Record High with Services Sector Boost

India's merchandise and services exports are expected to grow by 3% in the financial year 2025-26, reaching approximately $850 billion. The Global Trade Research Initiative (GTRI) has forecasted this rise, after the country’s total exports for the financial year 2024-25 reached $825 billion, with goods export at $438 billion and services export at $387 billion.

According to GTRI, India's exports are likely to face the toughest global trade environment in 2026. The institute stated that while India is trying to increase exports, it is being challenged by growing protectionism in developed economies, a slowdown in global demand, and new trade barriers related to climate change. GTRI's founder, Ajay Srivastava, emphasized that sustaining export expansion amid these circumstances would be challenging.

Export Forecast for 2025-26

In FY 2025-26, the goods export is expected to remain nearly stagnant due to weaker global demand and new tariffs imposed by the US. However, services exports could exceed $400 billion, which will help total exports reach around $850 billion.

Ajay Srivastava noted that the external environment is rapidly deteriorating, with Europe also presenting a significant challenge. The European Union is set to implement its Carbon Border Adjustment Mechanism (CBAM) from January 2026, effectively introducing a carbon tax on imports.

Recommendation for Review of Free Trade Agreements (FTAs)

GTRI recommended that the Indian government immediately review the performance of its Free Trade Agreements (FTAs) on a regional basis to ensure that these agreements are effectively promoting exports and integrating Indian companies into global value chains.