India’s exports to fall short of $1tn target,despite FTA push:GTRI

India’s total exports of goods and services are likely to remain around $850 billion in the current financial year, falling well short of the government’s $1-trillion target, even as New Delhi steps up efforts to sign free trade agreements (FTAs) with multiple countries, according to an analysis by the Global Trade Research Initiative (GTRI).
Merchandise exports, which stood at $438 billion in 2024-25, are expected to remain broadly flat in the ongoing fiscal amid weak global demand and elevated US tariffs. Services exports, however, are projected to cross $400 billion in 2025-26, up from $387 billion in the previous year.In the financial year ended March 2025, India’s total exports stood at $825 billion. For the current fiscal, the Centre has set an ambitious target of $1 trillion.
GTRI founder Ajay Srivastava said the target now “looks more aspirational than realistic in a slowing, protectionist global economy”. He noted that the external environment has deteriorated sharply, with the US under President Donald Trump sidelining World Trade Organisation norms in favour of steep unilateral tariffs.India’s exports to the US declined by around 21 per cent between May and November 2025 under the prevailing 50 per cent tariff regime, Srivastava said. He added that unless Washington rolls back the additional 25 per cent penalty tariff linked to India’s Russian oil purchases or concludes a trade deal, exports to India’s largest market could see further erosion.
During April–November of the current financial year, India’s total exports rose 5.43 per cent year-on-year to $562.13 billion, compared with $533.16 billion in the same period last year. Merchandise exports increased marginally to $292.07 billion from $284.60 billion in April–November 2024, according to data from the Ministry of Commerce and Industry.
However, goods exports came under pressure in the second half of 2025 due to high US tariffs and subdued global demand, a trend GTRI expects to persist into next year, notwithstanding India’s push for new trade agreements.“India enters 2026 facing a far tougher global trade environment than it has seen in years,” GTRI said, pointing to rising protectionism in advanced economies, weakening global demand and the emergence of climate-linked trade barriers.
Indian exporters are also preparing for the European Union’s Carbon Border Adjustment Mechanism (CBAM), set to take effect from January 1, 2026. The carbon tax regime has already reduced India’s steel exports to the EU by about 24 per cent due to compliance and reporting requirements.In 2025, India concluded trade agreements with the UK, Oman and New Zealand, taking the total number of comprehensive FTAs to 18. Negotiations are ongoing with the US, the EU, Russia and Mexico. If finalised, India would have trade agreements with nearly all major economies, barring China.“The challenge now is not signing more deals, but making existing ones work,” Srivastava said. He urged the government to undertake a sector-wise review of FTAs to ensure they are expanding exports, integrating Indian firms into global value chains and delivering tangible trade gains, rather than remaining under-utilised diplomatic achievements.

(Business Correspondent)