India’s Export Performance

India’s exports have shown strong post-pandemic growth, reflecting its emergence as a resilient economy. The Economic Survey 2025-26 described India’s growth as “the envy of the world”, citing the country’s strong banking system, ample foreign reserves, and stable current account. This momentum is supported by targeted import substitution and strategic measures that integrate India into global value chains.

Key Facts About India’s Export Performance

Overall Export Performance

Between April 2025 and January 2026, India’s total exports (goods and services combined) reached approximately USD 720.76 billion, marking a 6.15% growth compared to the previous year despite global uncertainties.

Export Diversification

India ranks among the top five countries globally for product diversity and top three for trade partner diversity, which helps the country withstand global demand fluctuations and supply chain disruptions.

Sectoral Performance

• Petroleum Products: India is the 7th-largest exporter of refined petroleum products and among the top five refining nations worldwide.

• Electronics: Electronics exports rose to become India’s third-largest export category, with smartphone exports reaching Rs 1 lakh crore, a 55% increase from the previous year.

• Pharmaceuticals and Chemicals: India ranks 11th globally in pharmaceutical exports, holding a 3% share of the global market. Exports of medical devices grew from USD 2.5 billion in FY21 to USD 4.1 billion in FY25.

• Textiles and Apparel: India is the 6th-largest global exporter, with exports increasing from USD 35.87 billion (FY24) to USD 37.75 billion (FY25).

• Automobiles: Vehicle exports increased from 4,131 thousand units (FY21) to 5,357 thousand units (FY25).

• Defence Exports: Defence exports reached a record Rs 23,622 crore in FY24-25, up from less than Rs 1,000 crore in 2014. Indian defence products are now exported to over 100 countries, with a target of Rs 50,000 crore by 2029.

• Services Exports: India’s services exports hit a record USD 387.5 billion, resulting in a trade surplus of USD 188.8 billion.

Trade Partners and Agreements

India has signed 9 Free Trade Agreements (FTAs) in the last three years, covering 38 countries. These agreements provide zero-duty access to markets representing approximately 70% of global GDP, helping India diversify trade partners and reduce dependence on a single market.

Steps Taken to Boost Exports

Production-Linked Incentives (PLI)

• Automobile and Auto Components: Encourages high-value advanced automotive technologies, attracting Rs 35,657 crore in investments.

• Bulk Drugs: Reduces reliance on imported Active Pharmaceutical Ingredients (APIs) and Key Starting Materials (KSMs), creating an annual capacity of 55,000 MT for 26 critical products.

Export Promotion Mission (EPM)

The EPM, with an outlay of Rs 25,060 crore (FY25-26 to FY30-31), aims to strengthen the export ecosystem. It has two sub-schemes: Niryat Protsahan and Niryat Disha, providing:

• E-Commerce Credit Assistance: Up to Rs 50 lakh (domestic) and Rs 5 crore (overseas).

• TRACE: Reimburses 60–75% of compliance costs.

• FLOW and LIFT: Support for overseas warehousing and freight costs.

• INSIGHT: Funding for trade intelligence and capacity-building.

Semiconductor and Electronics Initiatives

• Electronics Component Manufacturing Scheme (ECMS): Rs 40,000 crore to integrate India into global electronics value chains.

• India Semiconductor Mission 2.0: Focuses on research, technology development, and workforce creation in semiconductor fabrication, assembly, and design.

Sector-Specific Export Promotion

• Electric Vehicles: PM E-DRIVE and SMEC schemes provide incentives for manufacturing electric two-wheelers, three-wheelers, trucks, and passenger cars for domestic and export markets.

• Defence Sector: Policies such as DAP 2020 and DPM 2025, along with industrial corridors in UP and Tamil Nadu, have attracted over Rs 9,145 crore in investments.

• Infrastructure and Ecosystem Development: Initiatives include Rare Earth Corridors, Chemical Parks, and Biopharma SHAKTI.

Services Export Promotion

Services exports are bolstered by Global Capability Centres (GCCs), SEZ incentives, and India’s high AI skill penetration, which supports digital services exports.

Challenges Facing India’s Export Sector

High Tariffs and Protectionism

• US tariffs of up to 50% in 2025 led to a 22% decline in exports to the US.

• Although an interim trade deal in February 2026 reduced tariffs to 18%, protectionist measures remain a concern.

Non-Tariff and Climate Barriers

• Small and medium exporters face complex Rules of Origin, high documentation costs, and compliance risks.

• The EU Carbon Border Adjustment Mechanism (CBAM), effective 2026, imposes carbon taxes on steel, aluminium, and cement, increasing costs for Indian exporters.

Diversification and Supply Chain Risks

• Heavy reliance on the US (18% of exports) limits diversification.

• Geopolitical tensions in the Middle East, which supplies ~55% of India’s crude oil, could increase export costs.

• Competition from Vietnam and Bangladesh pressures labor-intensive sectors.

Measures Needed to Strengthen Exports

1. Policy Frameworks: Implement Single Window 2.0, integrate customs and certification processes, and finalize FTAs with asymmetric structures.

2. Upgrade Logistics: Integrate Dedicated Freight Corridors with mega ports, expand export processing zones, multi-modal parks, and cold chains.

3. Sustainability Compliance: Develop Green Export Credit and carbon-neutral frameworks to counter EU CBAM.

4. Scale Manufacturing: Expand PLI schemes for rare earths, semiconductors, and link traditional sectors like handlooms to global markets.

5. Leverage Digital Growth: Remove e-commerce caps, implement blockchain-based trade platforms, and promote digital services exports.

6. Mitigate Supply Chain Risks: Maintain buffer stocks of critical commodities like crude oil, lithium, cobalt, and rare earths.

Conclusion

India’s export sector shows resilient growth of 6.15% despite global headwinds, supported by diversification, PLI schemes, and the Export Promotion Mission. However, challenges such as tariffs, EU carbon taxes, geopolitical risks, and global competition require strategic interventions in infrastructure, sustainability compliance, trade agreements, and manufacturing to maintain and enhance India’s global competitiveness.