India’s $1 trillion export target needs more than FTAs: India wants to raise exports of goods and services from a record $863 billion in 2025-26 to $1 trillion in 2026-27, an increase of nearly 16%. Commerce and Industry Minister Piyush Goyal has expressed confidence that the target can be achieved, pointing to export momentum and the expanding network of free trade agreements (FTAs). The government is also counting on the country’s large base of micro, small and medium enterprises (MSMEs) and its growing startup ecosystem.
The latest figures offer grounds for optimism, though the annual target remains demanding. India’s exports of goods and services reached an estimated $399.27 billion between April and August 2026, up 15.55% from the corresponding period a year earlier, according to the Ministry of Commerce and Industry. The pace of growth is encouraging, but five months of data cannot settle the question of whether exports will reach $1 trillion. The outcome will depend on external demand, commodity prices, the composition of exports and the ability of Indian firms to overcome domestic supply constraints.
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The central challenge is to turn this momentum into sustained gains in international markets. Trade agreements can lower tariffs and open doors, but exporters still have to meet buyers’ requirements on price, quality, delivery and reliability. India’s export ambitions will ultimately be judged by its ability to win orders and retain customers.
Global demand and India’s manufacturing gap
The international trading environment is becoming harder to predict. Geopolitical tensions, shipping disruptions and protectionist measures have raised costs and complicated market access. Major economies increasingly use tariffs, subsidies and domestic-content requirements to support local industries. Even where Indian goods enjoy lower tariffs, exporters must meet technical standards, obtain product certifications and comply with environmental and supply-chain rules.
Demand is another concern. A slowdown in the United States or Europe could affect Indian shipments of engineering goods, textiles, gems and jewellery, chemicals and other manufactured products. At the same time, Indian firms face competition from China and other Asian manufacturing economies. Lower labour costs or preferential access alone cannot secure contracts. Buyers also expect consistent quality, competitive prices and deliveries that arrive on schedule.
India’s export basket reflects a longstanding imbalance. Services, particularly information technology and business services, have become major sources of export earnings. Merchandise exports have also reached record levels, with strengths in pharmaceuticals, petroleum products, engineering goods and gems and jewellery. Yet India has considerable room to expand its share of global manufacturing trade.
A larger export economy will require deeper participation in global value chains, where components and finished products cross borders at different stages of production. Vietnam has built a substantial role in electronics manufacturing, while Taiwan occupies an important position in semiconductor production. India has made progress in electronics assembly, but expanding domestic capabilities in components, precision engineering and advanced manufacturing remains essential. That will require stronger supplier networks, more reliable logistics and a workforce equipped for increasingly sophisticated production.
MSMEs face a particular disadvantage. Many manufacture goods with export potential but struggle to absorb the costs of reaching overseas customers. Production is only one part of the expense. Testing, certification, packaging, freight, insurance, customs documentation, working capital and compliance with foreign regulations can all add to the bill. Large companies can spread these costs across greater volumes; a smaller exporter may find them prohibitive.
Helping such firms enter export markets is therefore central to the trillion-dollar ambition. India needs more businesses capable of exporting repeatedly, rather than a narrow group of established companies accounting for most of the gains.
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India’s $1 trillion export: FTAs open markets; firms must use them
India has concluded nine trade agreements in recent years, with the government highlighting preferential access to markets across nearly 38 developed countries. According to the Commerce Ministry’s account of the export target, these agreements are expected to improve access to economies with substantial purchasing power. Their commercial value, however, will depend on how much Indian business actually gains from the concessions.
An FTA does not automatically make a product competitive. Exporters must understand rules of origin, documentation requirements, product-specific tariff concessions and standards in the destination market. Firms that cannot demonstrate that their goods qualify for preferential treatment may continue paying normal tariffs even when an agreement is in force. Large companies can maintain specialist trade teams; smaller firms often lack the staff and expertise.
The government has recognised the information gap. Goyal has called on the Confederation of Indian Industry to establish FTA utilisation desks across its state councils to help businesses identify markets and understand the requirements for exporting. Such desks could be useful if they provide assistance beyond seminars and general guidance. Smaller firms need help with certification, identifying overseas buyers, resolving trade disputes and connecting with distributors.
The government should also publish regular data on the use of tariff concessions, broken down by agreement, sector and firm size. The number of agreements concluded is an inadequate measure of success. Actual utilisation would show whether exporters are benefiting from the negotiated terms and where additional support is needed.
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Logistics and policy stability shape export competitiveness
The cost of moving goods from a factory to a foreign customer can determine whether an exporter wins an order. India has invested in ports, highways, freight corridors and airports, but congestion, gaps between transport networks, warehousing expenses and uncertain delivery schedules can still undermine competitiveness. Delays are especially costly for perishable agricultural and marine products. Manufacturers supplying time-sensitive global production networks must also meet demanding delivery windows.
The government’s logistics and industrial-development plans could help address these constraints. Andhra Pradesh’s proposals involving Visakhapatnam’s role as a gateway to Southeast Asia, additional data-centre capacity, a semiconductor ecosystem around Tirupati and expanded renewable energy point to efforts to develop infrastructure and new export-oriented industries. Their contribution will depend on implementation, cost efficiency and the ability to attract firms that can compete in international markets.
Policy predictability is equally important. Investments in factories, machinery and overseas distribution take years to recover. Sudden changes in duties, export restrictions, taxation or compliance requirements can disrupt business plans and weaken confidence. Export incentives may help firms overcome initial disadvantages, but they cannot permanently offset expensive inputs, unreliable infrastructure or low productivity.
India’s $1 trillion export target is an ambitious annual milestone. The record $863 billion achieved in 2025-26, recent export growth, expanding services and new trade agreements provide a useful starting point. Reaching the target in 2026-27 will depend on whether that momentum survives changes in external demand and translates into orders across a wider range of industries.
The more consequential test is whether India can build an export economy in which firms of different sizes can compete and return to international markets with repeat orders. Trade agreements can create the opportunity. Competitiveness determines whether businesses can use it.