Summary:
India’s merchandise and services exports grew by over 4% in the first half of FY2025-26, reaching $413.3 billion, even as global trade faced supply chain disruptions and market volatility. Strong performance across key markets, led by the US, UAE, China, and Germany, helped India narrow its trade deficit despite rising imports.
Exports Defy Global Trade Turbulence
India’s exports demonstrated resilience in the first half of FY26, growing over 4% year-on-year to $413.3 billion, according to the Ministry of Commerce. The growth comes amid a turbulent global trade environment marked by supply chain disruptions, geopolitical tensions, and fluctuating market conditions. Notably, India recorded its highest-ever quarterly exports, totaling $204.4 billion during Q2 FY26 (July-September 2025).
Goods exports rose from $213 billion to $220 billion, while services exports grew from $182 billion to $193.7 billion, highlighting strong performance across both merchandise and services sectors.
Trade Deficit Narrowed Despite Import Surge
Rising imports, particularly in merchandise, contributed to overall import growth. However, the healthy rise in exports helped reduce India’s trade deficit by 2.28% compared to the same period last year. The ministry noted that while imports in September outpaced exports, strong export performance cushioned the impact on the overall trade balance.
Key Markets Drive Export Growth
Export growth was observed across 24 countries, with the United States, UAE, China, Germany, Bangladesh, and Brazil leading the way. Exports to the US surged from $40.42 billion in H1 FY25 to $45.82 billion in H1 FY26, reflecting robust demand for Indian goods. Conversely, shipments to the Netherlands and Singapore declined, primarily due to lower petroleum product exports.
Officials also noted a month-on-month dip in exports to the US during August and September, particularly in sectors impacted by tariffs of up to 50%. The complete effect of these duties will be clearer once October trade data is released.
Imports Rise in Electronics, Silver, Fertilisers, and Gold
On the import side, electronics, silver, fertilisers, and gold witnessed higher inflows, with increased electronics and silver imports driven by rising smartphone manufacturing activities. Despite this, cumulative gold imports fell by 8.7% in value and 25% in volume compared to H1 FY25, reflecting moderated demand.
Outlook
India’s ability to sustain export growth amid global trade headwinds underscores the resilience of its manufacturing and services sectors. Strong performance in key export markets, coupled with strategic diversification of trade partners, positions the country well to navigate global uncertainties and maintain positive trade momentum for the remainder of FY26.
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