India’s Goods Exports Seen Contracting 1% in FY26; Services Exports Remain Resilient but Growth Slows
India’s goods exports may fall 1% in FY26 amid global trade pressures, while services exports stay resilient but show signs of slower growth.
India’s export outlook shows pressure on goods shipments, with services exports continuing to support economic stability.
As per a report published by CareEdge Ratings, it is expected that the decline of India's goods exports will be around 1 per cent in FY26 which will be a reversal of the marginal increase achieved in the previous fiscal year. The scenario reflects increasing global trade pressures although services exports have been supporting the economy, at a slower pace.
According to the report, the main reason behind the drop in goods exports is the difficult global situation which includes the US tariffs as one of the major factors that have resulted in a decrease in international trade. CareEdge's prediction is a decrease of about 1 per cent in India's total exports for FY26, a figure that is significantly lower than the previous fiscal year's predicted growth of 0.1 per cent.
Data from the April–October period highlights the slowdown. Total goods exports grew by 3.3 per cent during April–October FY25, but growth sharply eased to just 0.5 per cent in the same period of FY26. The decline has been more pronounced in petroleum exports, which fell 13.9 per cent in April–October FY25 and further deepened to a 17.1 per cent drop in April–October FY26.
Non-petroleum exports have shown relatively better resilience, though momentum has moderated. These exports grew 7.5 per cent during April–October FY25, but growth slowed to 3.9 per cent in the corresponding period of FY26. Despite this support, overall goods exports remain under pressure, leading to the projected contraction for the full year.
In contrast, services exports have continued to perform steadily, supported mainly by software and business services. However, their growth rate has also moderated. Services exports recorded a remarkable growth of 31.4% and reached USD 181.4 billion during the period April-October FY23. The growth rate slowed down to 5.8% in FY24, however, it recovered in FY25 and reached 12.7%, with exports totaling USD 216.4 billion.
For the period April-October FY26, the figure for services exports increased again to USD 234.2 billion, which is an 8.2% growth compared to the same period last year. According to CareEdge, the growth of services exports will be around 8.5% in FY26, which is lower than the 13.6% rise in FY25.
The report stated that India’s goods exports are under pressure due to global challenges and trade restrictions but in contrast, the services exports have been relatively strong, thereby providing stability and cushioning the negative economic impact.
