India exports may hit $950 bn by FY27

New Delhi: India's goods and services exports could reach $840-850 billion in FY26 and rise to about $950 billion in 2026-27, driven by free trade agreements particularly with West Asian countries and strength in services and technology-led sectors such as electronics, exporters said. Rising tariff barriers and climate-linked trade restrictions, however, are expected to pose significant challenges to sustaining export growth, they added."The worst for Indian exports is over and we expect tech-driven sectors to do well. Exports in 2025-26 could be in the range of $840-850 billion while FY27 could see $950 billion of total exports," said Ajay Sahai, director general, Federation of Indian Export Organisations (FIEO).Exporters said that the Red Sea crisis is mostly resolved and the industry has factored in the steep 50% tariffs imposed by the US. It is successfully diversifying its products and markets, supported by supported by the Centre's Export Promotion Mission. 126292689 "Overall textile and apparel exports could rise 10-20% next year as India's free trade deal with the UK comes into force and domestic measures like GST rationalisation, removal of quality control orders and duty free cotton ensure fundamental improvement of the industry," said Sanjay K Jain, managing director, T T Ltd.Similarly, electronics manufacturing, which is now India's third-largest export category, rising from the seventh position a decade ago, is likely to post a robust growth in shipments next year.India's cumulative exports- merchandise and services-in April-November FY26 is estimated at $562.13 billion, 5.43% higher than $533.16 billion a year ago.New Delhi firmed up three significant trade agreements in 2025, including signing the pacts the UK and Oman, and completing the negotiations with New Zealand. The India-UK Comprehensive Economic and Trade Agreement (CETA) is expected to come into force in 2026. Exporters are cautious, with hopes pinned on an early bilateral trade agreement with the US and progress on a trade deal with the EU."FTAs have a lead time which will show results next year. However, labour intensive sectors could get hit by the US tariffs. The EU market is not growing much. It is West Asia which is expected to drive exports growth," said an industry watcher.Among services, IT could be impacted due to the use of AI."The next year looks pretty uncertain unless something comes up on the American tariffs front as the US is our largest market. Since toy manufacturing is done by OEMs, some companies have shifted out the tools to make toys such as moulds from India to Vietnam and Indonesia due to the tariffs," said Manu Gupta, chairman, Toy Association of India.Exporters said that the US' 50% tariffs on India will prevent new business coming in for textiles but 50-60% regular business with the US will remain and that the currency is expected to strengthen. Moreover, cheaper wool imports from New Zealand, once the FTA is operational, will help the domestic textile industry."India will buy raw materials from many of its new FTA partners thereby doing away with the concerns of inverted duty structures," said a representative of the apparel industry.However, with the EU's Carbon Border Adjustment Mechanism (CBAM) moving from reporting to payment phase from January 1, 2026, every shipment of Indian steel and aluminium entering the EU will carry a carbon cost.

from Economic Times https://ift.tt/49KMBvc