Navigating Trade Winds: India's Export Dynamics Revealed

India's goods exports are anticipated to contract by 1% in FY26, largely due to US tariffs. While services exports maintain resilience, they face a deceleration in growth. CareEdge Ratings cites the contrasting trends between goods and services exports in a challenging global market landscape.

India's goods exports are projected to shrink by around 1% in FY26, representing a decline from marginal growth seen in previous years, as per a report by CareEdge Ratings. The analysis reveals a noticeable downturn in goods exports over recent months amid stable yet slowing services exports.

The report forecasts a contraction in India's goods exports by approximately 1% in FY26, following a minor 0.1% growth in FY25. According to CareEdge Ratings, this reduction is primarily attributed to US-imposed tariffs that have adversely affected global trade environments, making a visible dent in India's merchandise exports from April to October FY26, despite continued strength in services exports.

Data indicates that total goods export growth decelerated markedly. In the period from April-October FY25, goods exports grew by 3.3%, but reduced to a mere 0.5% growth in the corresponding period of FY26. A sharper decline was observed in petroleum exports, which dropped by 13.9% in the previous year and further slumped by 17.1% in FY26. Conversely, non-petroleum exports demonstrated relative resilience, with growth rates of 7.5% in FY25 tapering to 3.9% in FY26. Despite the resilience in non-petroleum exports, the overall goods export sector remains pressured, leading to the forecasted contraction in FY26.

Meanwhile, services exports have continued robust performance, chiefly driven by software and business services, despite the deceleration in growth rates. Services exports markedly increased by 31.4% to USD 181.4 billion during April-October FY23 and moderated to a 5.8% increase to USD 192.0 billion in FY24. The growth regained momentum with a 12.7% rise to USD 216.4 billion in FY25. In FY26 (April-October), this figure further climbed to USD 234.2 billion, albeit at a slower growth rate of 8.2% year-on-year. The report anticipates services exports will persist in robustness with an 8.5% growth in FY26, albeit lower than the 13.6% realized in FY25.

In summary, the CareEdge Ratings report underscores that while global trade constraints and US tariffs weigh heavily on goods exports, India's services sector continues to underpin economic stability amidst turbulent trade conditions. (ANI)

(With inputs from agencies.)