India has achieved a historic milestone in international trade, with goods (merchandise) exports reaching a record $441.78 billion in the financial year ending March 31, 2026 (FY26).
When combined with services, India’s total exports scaled a fresh peak of $860.09 billion, marking a 4.22% year-on-year increase despite significant global headwinds, including trade route disruptions in West Asia and a cooling global economy.
1. FY26 Trade Performance Overview
The Commerce Ministry’s data, released in mid-April 2026, highlights a resilient export sector that managed modest growth in goods and robust growth in services.
| Trade Component | FY26 Value (Billions) | FY25 Value (Billions) | YoY Growth |
| Merchandise Exports | $441.78 | $437.70 | +0.93% |
| Services Exports | $418.31 | $387.55 | +7.94% |
| Total Exports | $860.09 | $825.26 | +4.22% |
| Total Imports | ~$979.40 | $919.92 | +6.47% |
| Overall Trade Deficit | $119.31 | $94.66 | +26.03% |
2. Key Drivers of Merchandise Exports
The record-breaking $441B figure was powered by a few standout sectors, particularly electronics, which offset a decline in petroleum product values.
- Electronic Goods: The “star performer” of FY26, electronics exports surged 24.4% to $48 billion, driven largely by mobile phone manufacturing under the PLI (Production Linked Incentive) scheme.
- Engineering Goods: Remained a steady pillar, contributing roughly $109 billion to the total, with growth fueled by machinery and automobile components.
- Pharmaceuticals: Reached $31.1 billion, maintaining a 2.1% growth rate despite regulatory challenges in some Western markets.
- The “March Surge”: March 2026 alone saw merchandise exports of $38.92 billion, the highest monthly figure of the entire fiscal year.
3. Shifting Trading Partners
A major structural shift occurred in India’s bilateral trade relationships during FY26:
- China Displaces the US: For the first time in four years, China emerged as India’s largest overall trading partner ($151.1B), displacing the United States ($140.2B).
- Fastest Growing Export Destination: Exports to China grew by 36.7% to reach $19.48 billion, primarily in chemicals, minerals, and engineering equipment.
- US Trade Surplus Narrows: India’s trade surplus with the US fell to $34.41 billion (from $40.88 billion in FY25) as imports from the US jumped 16%, while Indian exports to the US grew only 1%.
4. Challenges: The Widening Deficit
Despite the record export figures, the overall trade deficit widened to $119.31 billion (a three-year high).
- The Gold “Price” Effect: Gold imports rose 24.1% in value to $71.98 billion. Interestingly, actual volume fell from 757 tons to 721 tons—the surge was driven entirely by the record-high gold prices (~$100,000/kg) in early 2026.
- The West Asia Crisis: Commerce Secretary Rajesh Agrawal noted that the conflict in West Asia had a “severe impact” in March 2026, with exports to the region plunging over 57% in that month alone due to shipping disruptions.
