The geopolitical wildfire which has engulfed West Asia as an impact of the Iran and US-Israel conflict indeed has triggered global ramifications. The hard-nosed contest has severely fractured global trade, energy security and has created serious fissures in the supply chain resilience. Amidst such a precarious, volatile and hostile geopolitical and geo-economic atmosphere, India has etched a significant escalation in its export credentials.
The West Asian latitude and the critical maritime chokepoints in the region such as the Strait of Hormuz, which acts as the lifeline for cross continental trade, is massively disintegrated amidst the US-Iran conflict. Yet, India has not just secured its energy priorities and national security, but has ensured a resilient and consistent trade network and has etched record heights in the global export paradigm. Despite the huge costs incurred as an impact of the West Asian crisis, India has earmarked a significant increase in its exports in the current fiscal year compared to the previous year.
India’s total goods/merchandize exports for the Financial Year 2025-26 hit a benchmark of USD 441.8 billion, which is 1 per cent higher than the previous year. Further, the trade deficit for the Financial Year 2025-26 has also been significantly narrowed down to a nine-month low with USD 20.7 billion. India achieved this trade milestone, despite incurring the weights catalysed by the West Asia conflict. For example, the war in West Asia took a toll on the exports of March in spite of having a progressive track record throughout the year.
Imports for the month of March rose by 7.5 per cent i.e. to USD 775 billion. This led to the widening of the trade deficit to USD 333 billion. However, New Delhi successfully shielded against these volatilities and temporary deficits, this heralded a comprehensive export growth for the financial year. If the conflict in West Asia was not a gridlock, then the export number would have been significantly higher. Despite the 7.6 per cent decline in exports for the month of March, the overall exports for the year has risen. Meanwhile, the imports fell by 6.4 per cent i.e. to USD 59.6 billion. This has bridged the gaps in the trade deficit. Cumulatively, exports hit a record of used 860.1 billion.
Commending the record exports achieved by India, Commerce and Industry Minister Piyush Goyal wrote on his X social media platform, “Bharat sets a new export record! A matter of great pride as India achieves record exports of USD 860 billion in FY 2025-26. Despite global headwinds, India climbed the export benchmark reflecting the country’s resilience and growing strength in expanding its global trading footprint, the Commerce Minister further added. In fact, India’s exports have grown at a faster rate than the global average.
Despite tariff tussle escalated by the US President Donald Trump, the latest West Asia crisis and other political or economic hiccups, India sealed export surge, overcoming all bottlenecks. The major obstacle was the exports to West Asia. India regularly exports goods worth USD 6 billion every month to the region. However, owing to the conflict, the exports in the month of March was a meagre USD 2.5 billion. Successfully navigating these cahllenges India etched record exports in the Financial Year 2025-26.
Sectoral analysis of the export surge
The major propellants that catalysed the surge in India’s exports are engineering goods, defence exports, pharmaceutical sector etc. India has indeed diversified its export basket and generates revenue from various sectors, which helps New Delhi to retain export resilience despite global headwinds.
- Engineering Goods: In the Financial Year 2025-26, India exported engineering goods worth 10,82,729 crore. This is India’s largest export category with a wide margin. It includes export of machinery parts, automobiles, auto components and other industrial equipment. There is global demand for Made-in-India engineering goods and the country is seen as a credible trade partner.
- Defence: In the Financial Year 2025-26, Defence exports have witnessed a record surge with a record growth rate of 62 per cent. The defence exports have spiked from approximately USD 2.5 billion to USD 4.1 billion. India is exporting defence equipment including drones, missiles, aircrafts etc. to more than 80 countries. Thus, India is emerging as a major, credible and trustworthy defence export unit. Moreover, it also illustrates India’s emerging capabilities in defence indigenisation or seeking self-reliance in defence manufacturing.
- Petroleum Products: India exported petroleum products worth Rs. 4,75,120 in the Financial Year. With spiking India’s refining capacity, petroleum products are a major contributor to India’s export basket. As a key energy commodity to fuel the global economic engine, India’s refined petroleum products have huge demand in the global market.
- Electronic Goods: In the FY 2025-26, India exported electronic goods worth 4,22,122 crore. This includes smart phones, consumer electronics and other electronic components. Government initiatives such as Make in India and other production-linked incentives act as a boon to this manufacturing sector which inturn leads to an export spike. India is gradually emerging as a net exporter of the electronic commodities, thwarting its previous identity as the net importer of electronic goods. India was once heavily dependent on China for electronic commodities. However, the table has turned, India is gaining self-reliance in the sector.
- Pharmaceuticals and drugs: India is emerging as the epicentre for the global pharmaceutical sector which renders generic medicines and vaccines at affordable prices. IN FY 2025-26, India’s pharmaceutical exports are valued at 2,75,077 crores. Thus, India is a critical and credible player in the global healthcare supply chain.
- Organic & Inorganic chemicals: India also exports a vast quantity of organic and inorganic chemicals which was valued at 2,53,591 crores. India is a hub to export the chemicals that are used in agricultural, pharmaceutical and other sectors.
- Gems and Jewellery: For the Financial Year 2025-26, India’s gems and jewellery exports stood at 2,49,199 crore. India is one of the largest exporters of cut & polished diamonds and gold jewellery.
- Textiles and garments: Export from this sector for India is valued at Rs. 1,39,349 crores for the FY 2025-26. India is a textile hub which predominantly comprises Small and Medium industries(MSMEs), thus a backbone of the economy and a major employment generator. Ready-made garments including cotton and synthetic apparel have huge demand in the US and European market.
- Agricultural and marine commodities: India is also one of the largest exporters of agricultural products. India’s rice exports for the year marked at Rs. 1,02,030. India is the world’s largest rice exporter with both basmati and non-basmati varieties. India also exports a considerable quantity of fruits, vegetables and other horticultural products. Similarly, India’s marine product exports stood at Rs. 74,521 crore. With India’s emerging strong aquaculture industry, there is global demand for the country’s fish, shrimp etc.
Apart from the merchandise exports, the service exports also acted as a significant push to overall export potential of India. Service sector exports remained as a silent powerhouse, which delivered high-value products to the globe. For the first time, India’s service exports reached USD 400 billion, thus adding major strength to the country’s export strategy.
Despite persistent geopolitical and geo-economic bottlenecks, India achieved USD 860 billion exports for the FY 2025-26 surpassing the previous year record of USD 825 billion. This also reflects steady year-on-year growth irrespective of the geopolitical gridlocks. This trade surge is rooted in sound policy decisions, diplomatic leverage, diversified export basket and trade destinations etc. These fundamentals define the trade propositions of New Delhi that not just fortifies national security but also ensures resilient global supply chain with India emerging at its epicentre.
