India’s ambition of achieving USD 1 trillion in combined goods and services exports by the end of FY26 is increasingly difficult to realise, according to an assessment by the Global Trade Research Initiative (GTRI). The report highlights a growing disconnect between policy targets and economic realities, shaped by weak global demand and persistent domestic structural challenges.
The analysis notes a clear divergence between services and merchandise exports. Services exports—led by information technology and business services—have continued to show steady growth, reinforcing India’s strength in the global services market. In contrast, merchandise exports have struggled to regain momentum amid slowing demand in key markets such as the United States and Europe.
Geopolitical uncertainty, ongoing supply chain disruptions and a subdued global trade environment have further constrained growth in goods exports. GTRI founder Ajay Srivastava said global conditions remain unfavourable, with high interest rates, inflation and fiscal tightening dampening demand, while rising protectionism is increasing compliance costs for exporters.
Beyond external factors, the report underscores several domestic constraints affecting export competitiveness. High logistics costs, fragmented manufacturing ecosystems and regulatory complexity continue to limit India’s ability to scale up exports. While production-linked incentive (PLI) schemes have succeeded in attracting investment in select sectors, their impact on export volumes has so far been incremental rather than transformative.
GTRI cautions that meeting the USD 1 trillion target would require sustained double-digit export growth at a time when global trade remains sluggish. Srivastava warned that an excessive focus on headline targets risks sidelining critical priorities such as export diversification, higher value addition and deeper integration into global value chains.
While the assessment does not question India’s long-term export potential, it emphasises the near-term headwinds facing the economy. The report notes that although India’s services sector remains globally competitive, the absence of a robust manufacturing-led export engine, combined with an adverse external environment, makes the FY26 target difficult to achieve.
GTRI has called for a more calibrated and standardised export strategy focused on competitiveness and resilience. Key recommendations include improving trade infrastructure, lowering logistics and compliance costs, easing regulatory burdens and prioritising high-value exports over ambitious numerical targets.
