India’s services exports continued to cushion the impact of a widening merchandise trade deficit even as global trade slowed. Meanwhile, tariff uncertainties intensified, the Economic Survey 2025–26 said.

Total exports of goods and services touched a record $825.3 billion in FY25, rising 6.1% year-over-year, largely driven by services. In the first half of FY26, exports stood at $418.5 billion.

Merchandise exports remained subdued. During April–December 2025, goods exports grew 2.4% to $437.7 billion. However, non-petroleum, non-gems and jewellery exports rose a stronger 6.0%.

Imports continued to outpace exports, with merchandise imports increasing 5.9% year-over-year to $578.6 billion. This was led by electronics, machinery and chemical products. As a result, this widened the merchandise trade deficit to $248.3 billion, from $224.0 billion a year earlier.

The Survey said the services trade surplus remains the key stabiliser, offsetting a large part of the goods trade gap. However, it warned that tariff distortions—especially higher duties on intermediates than finished goods—have raised costs for exporters and hurt competitiveness.

Sustained export growth, the Survey said, will depend on easing logistics and input costs, fixing tariff structures, and improving trade facilitation. Rather than relying on protectionist measures, these steps are essential.

Ready to invest like a pro? Tradz by EquityPandit equips you with 100+ Free tools and knowledge you need to succeed. Download the Tradz app and gain access to daily stock lists and insightful market analysis and much more!