India’s external performance continues to demonstrate notable resilience amid global economic shocks, reflecting the structural strengths of a rapidly growing economy that is integrating more deeply into global markets, the Economic Survey 2025-26 has stated. The Survey, tabled in Parliament by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, highlights India’s expanding trade footprint, diversified partnerships, and services-led export strength despite a challenging global environment.
Rising Global Trade Share and Diversification
The Economic Survey underlines India’s steady rise as a key global trading nation. According to the WTO’s World Trade Statistics, India’s share of:
- Global merchandise exports nearly doubled from 1 per cent in 2005 to 1.8 per cent in 2024
- Global commercial services exports more than doubled from 2 per cent to 4.3 per cent over the same period
Beyond scale, India has achieved meaningful diversification across both products and markets. As per UNCTAD’s Trade and Development Report 2025, India ranks among the leading economies in trade partner diversification, placing third in the Global South and recording a trade diversity score higher than all Global North economies.
In merchandise trade diversity, India ranks fourth in the Global South, after Thailand, China and Turkey, with a strong index score of 0.88, reflecting broad-based export capabilities.
Record Export Performance and Sustained Momentum
India’s total exports reached a record USD 825.3 billion in FY 2024-25, registering a 6.1 per cent year-on-year increase. This performance was driven primarily by robust growth in services exports, which expanded by 13.6 per cent (YoY).
Export momentum extended into FY 2025-26, with Q1, Q2 and Q3 each recording the highest-ever exports for their respective quarters, despite heightened global uncertainty.
Merchandise Trade: Manufacturing-Led Strength
In FY 2024-25, India’s merchandise exports stood at USD 437.7 billion, while non-petroleum exports reached a historic high of USD 374.3 billion. Key sectors driving growth included:
- Electronics
- Pharmaceuticals
- Electrical machinery
- Automobiles
The Survey notes that:
- Telecom instrument exports recorded a sharp 51.2 per cent (YoY) growth
- Drug formulations and biologicals grew by 11.2 per cent (YoY)
These trends underline India’s rising competitiveness in electronics manufacturing and reinforce its standing as a global pharmaceutical hub.
Agriculture and Pharmaceutical Exports
Agricultural exports rose from USD 34.5 billion in FY 2019-20 to USD 51.1 billion in FY 2024-25, registering a CAGR of 8.2 per cent. The Survey highlights the potential for India to achieve USD 100 billion in combined exports of agriculture, marine products, and food & beverages within the next four years.
Pharmaceutical exports increased from USD 1.9 billion in FY 2000-01 to USD 30.5 billion in FY 2024-25, representing a nearly 16-fold expansion, supported by market diversification, regulatory alignment, and capacity enhancement.
Role of the Production-Linked Incentive (PLI) Scheme
The Economic Survey underscores the contribution of the Production-Linked Incentive (PLI) scheme in strengthening export performance in sectors such as:
- Mobile manufacturing
- Electronics components
- Active pharmaceutical ingredients
- Medical devices
Between FY 2020-21 and FY 2024-25, exports from PLI-supported sectors grew at an average annual growth rate (AAGR) of 10.6 per cent, while imports grew at an AAGR of 12.6 per cent, reflecting strong domestic demand for intermediate inputs and capital goods.
Imports and Domestic Demand Signals
India’s merchandise imports increased by 6.3 per cent (YoY) in FY 2024-25 to USD 721.2 billion. Growth was driven mainly by non-petroleum, non-gems and jewellery imports, which rose to USD 446.5 billion from USD 421 billion in FY 2023-24.
The Survey attributes this trend to sustained demand for critical intermediates and capital goods, indicating continued investment and industrial activity.
Expanding Trade Agreements and Global Integration
India’s diversified trade strategy is being reinforced through an expanding network of Free Trade Agreements (FTAs). Recently concluded agreements include:
- India-UK Comprehensive Economic and Trade Agreement (CETA)
- India-Oman Comprehensive Economic Partnership Agreement (CEPA)
Negotiations with New Zealand and the European Union were concluded in December 2025 and January 2026, respectively, while trade engagements with the United States, Chile and Peru are ongoing. These agreements support deeper integration into global value chains.
Services Trade: The Anchor of External Stability
India’s services exports touched an all-time high of USD 387.6 billion in FY 2024-25, growing by 13.6 per cent, reinforcing the country’s role as a global hub for technology and business services.
This strength is closely linked to India’s success as a centre for Global Capability Centres (GCCs), which expanded at a 7 per cent CAGR between FY 2019-20 and FY 2024-25.
Services imports rose by 11.4 per cent (YoY) to USD 198.7 billion, reflecting increasing cross-border demand for business and financial services. Consequently, the services trade surplus widened to a record USD 188.8 billion in FY 2024-25.
Conclusion
The Economic Survey 2025-26 concludes that India’s external sector performance is characterised by scale, diversification and structural resilience. Rising global market shares, sustained export momentum, manufacturing competitiveness, and a record services surplus position India to absorb global shocks while continuing to deepen its integration with the global economy. (Source: PIB PR ID 2219966)
Economic Survey of India 2025-26 dated 29/01/2026