The interim trade deal with the US that may exempt India from reciprocal tariffs itself could offer a big advantage over the competitors,
| Photo Credit:
Tryaging
India’s goods exports in FY26 are likely to increase 12 per cent (year-on-year) to $525 billion, after remaining flat at about $437 billion in FY25, buoyed by free trade agreements, gradual resumption of transportation through the Red Sea route, and foreign buyers looking to diversify sourcing due to global uncertainties, according to exporters’ body FIEO.
Overall goods and services exports are expected to touch $ 1 trillion during 2025-26, compared to $825 billion in 2024-25, with services exporters estimated to rise about 20 per cent to $465-475 billion this fiscal, it said.
However, there are concerns around increased protectionism and use of non-tariff measures by countries, including the G-20 economies. EU’s measures such as Carbon Border Adjustment Mechanism and Digital Product Passport are major areas of worry, especially for the MSME sector.
Expectations of a spurt in export growth this fiscal could partly be attributed to international buyers seeking to diversify their sourcing due to the global economic uncertainties, according to FIEO President SC Ralhan.
India could also get some of China’s business due to its on-going trade conflict with the US, but it may be limited to around $5 billion.
A major push in exports is expected from the FTAs that India is finalising, although the one with the UK already announced and the early deal with the EU that is to be wrapped up soon, will take over a year to be implemented.
The interim trade deal with the US that may exempt India from reciprocal tariffs itself could offer a big advantage over the competitors, FIEO DG Ajay Sahai said.
A gradual resumption of movement of export cargo through the Red Sea route has also come as a relief for Indian exporters. Shipping costs and time for Indian exporters sending goods to the EU and parts of the US had increased significantly when they could not ship through the Red Sea route due to attacks by Yemen-based Houthi militants. They were forced to use the longer route via the Cape of Good Hope.
“Consignments are gradually going through this important sea route. It will cut transportation time,” Sahai said. Freight rates have also stabilised because of a fall in demand from China, he added.
In FY26, export growth is expected across in all major sectors including electronics, engineering goods, chemicals, textile and clothing, pharma, agriculture, petroleum and gems & jewellery, per FIEO estimates.
Apart from the EU’s Carbon Border Adjustment Mechanism, trouble is also expected from the implementation of Digital Product Passport (DPP) on January 1, 2026, FIEO noted.
It will be mandatory for a wide range of products, starting with sectors such as electronics, batteries, textiles and construction materials from January 1, 2026 with wider rollouts expected by 2030.
DPP aims to digitally record, store, and share information about a product’s entire life cycle, from raw materials to manufacturing, usage, recycling, and disposal. It may increase the compliance burden particularly for the exporters from the MSMEs, it noted.
Published on May 27, 2025
The interim trade deal with the US that may exempt India from reciprocal tariffs itself could offer a big advantage over the competitors,
| Photo Credit:
Tryaging
India’s goods exports in FY26 are likely to increase 12 per cent (year-on-year) to $525 billion, after remaining flat at about $437 billion in FY25, buoyed by free trade agreements, gradual resumption of transportation through the Red Sea route, and foreign buyers looking to diversify sourcing due to global uncertainties, according to exporters’ body FIEO.
Overall goods and services exports are expected to touch $ 1 trillion during 2025-26, compared to $825 billion in 2024-25, with services exporters estimated to rise about 20 per cent to $465-475 billion this fiscal, it said.
However, there are concerns around increased protectionism and use of non-tariff measures by countries, including the G-20 economies. EU’s measures such as Carbon Border Adjustment Mechanism and Digital Product Passport are major areas of worry, especially for the MSME sector.
Expectations of a spurt in export growth this fiscal could partly be attributed to international buyers seeking to diversify their sourcing due to the global economic uncertainties, according to FIEO President SC Ralhan.
India could also get some of China’s business due to its on-going trade conflict with the US, but it may be limited to around $5 billion.
A major push in exports is expected from the FTAs that India is finalising, although the one with the UK already announced and the early deal with the EU that is to be wrapped up soon, will take over a year to be implemented.
The interim trade deal with the US that may exempt India from reciprocal tariffs itself could offer a big advantage over the competitors, FIEO DG Ajay Sahai said.
A gradual resumption of movement of export cargo through the Red Sea route has also come as a relief for Indian exporters. Shipping costs and time for Indian exporters sending goods to the EU and parts of the US had increased significantly when they could not ship through the Red Sea route due to attacks by Yemen-based Houthi militants. They were forced to use the longer route via the Cape of Good Hope.
“Consignments are gradually going through this important sea route. It will cut transportation time,” Sahai said. Freight rates have also stabilised because of a fall in demand from China, he added.
In FY26, export growth is expected across in all major sectors including electronics, engineering goods, chemicals, textile and clothing, pharma, agriculture, petroleum and gems & jewellery, per FIEO estimates.
Apart from the EU’s Carbon Border Adjustment Mechanism, trouble is also expected from the implementation of Digital Product Passport (DPP) on January 1, 2026, FIEO noted.
It will be mandatory for a wide range of products, starting with sectors such as electronics, batteries, textiles and construction materials from January 1, 2026 with wider rollouts expected by 2030.
DPP aims to digitally record, store, and share information about a product’s entire life cycle, from raw materials to manufacturing, usage, recycling, and disposal. It may increase the compliance burden particularly for the exporters from the MSMEs, it noted.
Published on May 27, 2025
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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