India’s export sector is showing signs of resilience and stability, with steady performance across key segments and a favourable outlook extending into 2026, supported by improving global demand, policy support and diversification of markets and products.
Merchandise exports have remained largely range-bound in recent months amid a mixed global trade environment, but sectors such as engineering goods, electronics, pharmaceuticals and chemicals continue to provide underlying strength. Electronics exports, in particular, have emerged as a major growth driver, aided by production-linked incentive (PLI) schemes and rising integration into global value chains.
Services exports remain the standout performer, led by IT and IT-enabled services, business services, financial services and travel. Robust demand from the US, Europe and emerging markets has helped offset softness in certain merchandise categories, keeping India’s overall export earnings on a stable trajectory.
Trade diversification efforts are also beginning to yield results. Exports to Africa, Latin America and parts of West Asia have improved, reducing dependence on traditional markets. At the same time, free trade agreements with the UAE and Australia, and ongoing negotiations with the UK and the European Union, are expected to open new opportunities over the medium term.
Logistics and infrastructure upgrades, including port modernisation, dedicated freight corridors and digitalisation of customs processes, are helping reduce transaction costs and improve export competitiveness. Industry participants note that easing supply chain disruptions and softer input costs could further support margins in the coming quarters.
Looking ahead, economists and trade experts expect export momentum to gradually strengthen in 2025 and extend into 2026, assuming a modest recovery in global trade, stable commodity prices and continued policy support. While external risks remain—from geopolitical tensions to currency volatility—India’s broad-based export basket and strong services performance position it well to navigate global uncertainties and sustain growth over the medium term.
