India’s exports are set to reach $850bn this fiscal, though growth is slowed by new EU carbon taxes and global tariffs.
India’s total exports are forecast to climb to $850 billion during the 2025-26 financial year, representing a 3 per cent increase. This estimate, provided by the Global Trade Research Initiative, comes as the nation navigates a challenging landscape of rising international protectionism and cooling global demand.
For the 2024-25 period, combined exports reached $825 billion, consisting of $438 billion in merchandise and $387 billion in services. However, the outlook for 2026 suggests a more difficult environment. While services are expected to surpass $400 billion, merchandise exports may remain stagnant due to new tariff pressures and shifting trade policies in major markets.
Environmental regulations are also set to impact trade volumes. The European Union is scheduled to implement its Carbon Border Adjustment Mechanism on 1 January 2026. This initiative, effectively a carbon tax, has already contributed to a 24 per cent decline in Indian steel exports to the region due to strict reporting and compliance costs.
To counter these headwinds, experts suggest the government conduct a rigorous sector-by-sector audit of existing Free Trade Agreements. The aim is to ensure these deals provide genuine market access and integrate local industries more effectively into global supply chains, rather than serving as mere diplomatic gestures.
SOURCE – ET
