INDIA’S EXPORTS LIKELY TO MISS $1 TRILLION TARGET DESPITE FTA PUSH

NEWS – India’s combined merchandise and services exports are projected to reach around $850 billion in FY 2025–26, significantly below the government’s ambitious $1 trillion target, despite active Free Trade Agreement (FTA) engagements.

HIGHLIGHTS

Current Export Performance

• FY 2024–25 (Projected): ~$825 billion
  • Merchandise: ~$438 billion
  • Services: ~$387 billion
• FY 2025–26 Outlook (GTRI Projection):
  • Expected to reach ~$850 billion
  • Services may cross $400 billion, merchandise to remain flat

Recent Trade Trends

• April–November 2025 exports: $562.13 billion
• Goods exports to the US: Fell by ~21%
• Services exports: Increased marginally
• Merchandise dip attributed to:
  • Weak global demand
  • Rising protectionism
  • Higher tariffs in key markets

Key Challenges

• Weak global demand
• EU Carbon Border Adjustment Mechanism from 2026 — compliance costs already reducing India–EU steel exports
• US tariffs & unilateral trade actions
• Slow global recovery affecting manufacturing supply chains

FTA Developments

• New FTAs in 2025: UK, Oman, New Zealand
• Ongoing negotiations with USA, EU, Russia, Mexico
• India now has ~18 comprehensive FTAs
• Focus shifting to sector-wise evaluation to ensure measurable benefits

Strategic Significance

• FTAs alone insufficient without:
  • Competitiveness enhancement
  • Supply chain resilience
  • Market diversification
• Need stronger push for:
  • Manufacturing productivity
  • Technology adoption
  • Infrastructure and logistics efficiency