India’s Exports Show Resilience Despite US Tariffs, Growth Momentum Seen Continuing Into 2026

Export sector adapts amid global disruptions and tariff pressures​

India’s export sector remained resilient in 2025 despite facing a sharp escalation in trade barriers, including a 50 per cent duty imposed by the United States on Indian goods. Exporters responded by diversifying markets and products, helping sustain export momentum, which is now expected to extend into 2026.

Senior officials in the commerce ministry noted that India’s merchandise exports have repeatedly adapted to major global disruptions over the past few years. These include the Covid 19 pandemic, the Russia Ukraine conflict, the Israel Hamas war, the Red Sea shipping crisis, semiconductor supply constraints, and the latest round of high US tariffs.

Merchandise export trend remains supportive​

India’s outbound shipments rose steadily from USD 276.5 billion in 2020 to USD 395.5 billion in 2021 and further to USD 453.3 billion in 2022. Exports moderated to USD 389.5 billion in 2023 before rebounding to USD 443 billion in 2024. During January to November 2025, merchandise exports stood at USD 407 billion.

Commerce Secretary Rajesh Agrawal said India’s combined exports of goods and services reached a historic high of USD 825.25 billion in 2024 to 25, reflecting over 6 per cent year on year growth. He added that this positive trajectory has continued into the current financial year, with exports amounting to USD 562 billion during April to November 2025.

Free trade agreements to support growth outlook​

Agrawal said current trends indicate that India’s exports are well placed to deliver solid growth in 2026. He highlighted that free trade agreements with the UK, Oman, and New Zealand are set to come into force next year, unlocking improved market access for Indian goods and services.

Although higher US tariffs impacted shipments to America during September and October 2025, exports to the US rebounded sharply in November, rising 22.61 per cent to USD 6.98 billion.

Global trade outlook remains cautious​

Global uncertainties continue to influence exporter sentiment. The World Trade Organization has projected global trade growth of 2.4 per cent in 2025, while the outlook for 2026 has weakened significantly to 0.5 per cent.

The WTO has flagged risks from elevated tariffs, continued policy uncertainty, inventory drawdowns, and slowing GDP growth. Signs of stress have also emerged in manufacturing activity and confidence levels across developed economies.

Government measures to support exporters​

The government remains optimistic that a series of policy initiatives will help exporters manage uncertainties and register healthy growth in 2026. Officials said exports are being closely monitored, with steps taken to mitigate the impact of US tariff measures through a multi pronged strategy.

Key measures include a Rs 25,060 crore export promotion mission, additional collateral free credit facilities of up to Rs 20,000 crore, debt repayment moratoriums, extension of export credit tenors, and greater utilisation of free trade agreements.

Over the past five years, India has announced and implemented several FTAs, including agreements with Mauritius, Australia, the UAE, Oman, the UK, EFTA, and New Zealand.

Structural shifts driving export momentum​

According to industry participants, India’s export outlook for 2026 is being shaped by structural changes rather than a cyclical recovery in global trade.

Rudra Kumar Pandey, Partner at Shardul Amarchand Mangaldas & Co, said electronics have emerged as a key growth driver, with exports rising nearly 39 per cent in November. He added that engineering goods, pharmaceuticals, and automotive exports continue to reinforce this momentum.

Pandey also highlighted increasing geographic diversification, with exports expanding across Europe, East Asia, and South Asia, alongside traditional markets such as the US and the UAE. Shipments to Spain surged nearly 150 per cent, while exports to China and Bangladesh also recorded strong growth.

Exporters remain optimistic but cautious​

Ajay Sahai, Director General of the Federation of Indian Export Organisations, said global supply chain realignments, expanding trade partnerships, and improvements in ease of doing business position Indian exporters well for sustained momentum.

He added that broad based growth across engineering, electronics, pharmaceuticals, apparel, textiles, marine products, and services reflects the success of diversification and value addition efforts.

However, Sahai cautioned that exporters in 2026 may face challenges from geopolitical tensions, trade fragmentation, slower demand in developed markets, rising protectionism, higher compliance costs, exchange rate volatility, elevated freight and insurance expenses, and tighter global financing conditions, particularly affecting MSMEs.

The Indian rupee remained volatile through 2025, weakening by about 5 per cent during the year and hovering near 90 against the US dollar towards the end of December.