CHENNAI: India’s ambition of exporting goods and services worth $1 trillion by the end of FY26 is increasingly looking difficult to achieve, according to an assessment by Global Trade Research Initiative. The analysis highlights a growing disconnect between policy targets and prevailing economic conditions, shaped by a weak global trade environment and unresolved structural challenges at home.
The $1 trillion export goal has been projected as a key milestone in India’s push to expand its presence in global trade and strengthen its role in international supply chains. While services exports, led by information technology and business services, have continued to grow at a steady pace, merchandise exports have struggled to regain momentum. Sluggish demand in major markets such as the United States and Europe, along with geopolitical uncertainty and supply chain disruptions, has constrained growth in goods exports.
The assessment by GTRI founder Ajay Srivastava notes that global trade conditions remain unfavourable for a rapid expansion in exports. High interest rates, persistent inflation and fiscal tightening in advanced economies have weighed on consumption and investment, limiting import demand. At the same time, rising protectionist measures, including non-tariff barriers and stricter regulatory standards, have increased compliance costs for exporters from emerging markets, including India.
Domestic factors have further complicated the outlook. High logistics costs, fragmented manufacturing bases and regulatory complexity continue to undermine export competitiveness. Although initiatives such as production-linked incentive schemes have encouraged investment in select sectors, their impact on export volumes has so far been gradual rather than transformative.
The analysis also questions the assumptions underlying the $1 trillion target. Achieving such a figure within a short timeframe would require sustained double-digit growth across both goods and services at a time when global trade growth itself remains subdued. Srivastava argues that an excessive focus on headline numbers risks diverting attention from deeper issues such as export diversification, value addition and integration into global value chains.
From a broader perspective, the assessment does not point to a deterioration in India’s long-term export potential but underscores the constraints facing the economy in the near term. India’s services sector remains globally competitive, but the lack of a strong manufacturing export engine, combined with an adverse external environment, makes the $1 trillion target difficult to reach by FY26.
Overall, the report calls for a more calibrated export strategy that prioritises competitiveness and resilience over ambitious numerical milestones. Strengthening trade infrastructure, reducing transaction costs, easing regulatory friction and focusing on high-value, technology-intensive exports could yield more durable gains, even if the $1 trillion ambition remains elusive in the current fiscal horizon.