India's target of $1 trillion goods and services exports by FY26 seems unlikely to be met due to weak global demand.
New Delhi. India's target of $1 trillion goods and services exports by the end of FY26 seems unachievable at present. The latest report of the Global Trade Research Initiative (GTRI) released on Thursday said that there is pressure on commodity exports due to trade trends along with weak global demand and increasing protection. According to GTRI Founder Ajay Srivastava, India's exports are likely to have almost stable growth in the current year, while commodity exports will see almost no significant growth. According to estimates, India's total exports in FY26 may reach only about $850 billion, which is $150 billion short of the target of $1 trillion. However, the report also said that services exports could cross the $400 billion mark, which would prove to be the “only strong anchor” for India’s trade as global demand remains weak.
Big trade agreements can become game changers
According to Srivastava, the target can be achieved if India is successful in signing major trade agreements with the US and the European Union (EU). "It's possible, but maybe next year, not this year," he said.
Domestic economy strong, exports become cause for concern
The report also underlined that the domestic economic situation is stable. GDP and inflation figures are showing positive signs. However, pressure on GDP will remain mainly due to the weakness of the export sector.
Decline in trade with America and EU
According to recent data, India's exports to the US have declined by about 21% between May and November. The reason for this has been said to be the imposition of up to 50% tariff on Indian products by US President Donald Trump. The report warned that exports to India's biggest market could weaken further if additional tariffs are not rolled back or a trade deal is not struck.
In the case of the European Union, reports show that exports there dropped nearly 24%, while the tariffs have not even been fully implemented. The EU's Carbon Border Adjustment Mechanism (CBAM) will come into effect from January 1, 2026, which will impose additional carbon tax burden on Indian exporters.
Diversity in export destinations, but change in products necessary
However, GTRI says India has begun to diversify its export destinations to some extent. Despite declining exports to the US, exports to the rest of the world increased by 5.5%. But experts believe that geographical diversity alone is not enough. It will be necessary to include medium and high technology products in the export basket.
What should be the main focus for 2026?
According to the report, India's export strategy next year should focus on internal strengthening, as the country's influence on global geopolitics is limited. In such a situation, let us know what things should be focused on.
The report warns that tariffs, climate-related taxes and geopolitical uncertainty will continue to weigh on global trade. In such a situation, the growth of exports will depend on India's domestic competitiveness, better products and strong manufacturing capabilities. It is noteworthy that India's total exports in FY25 were $ 825 billion, which included $ 438 billion in goods exports and $ 387 billion in services exports.
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