India's total trade grew 5.4% in the fourth quarter of fiscal year 2026, reaching USD 1.84 trillion, according to the Trade Watch Quarterly report released by NITI Aayog on Tuesday. The growth was driven by strong services exports, which helped offset a decline in merchandise exports.
Services exports offset merchandise decline
Merchandise exports fell 2.8% to USD 112.03 billion, while imports surged 12% to USD 195 billion. However, India maintained a strong services trade surplus of USD 60.4 billion, supported by a 9% rise in services exports to USD 111 billion, compared with a 4.1% increase in services imports to USD 50.7 billion.
Services surplus helps offset trade deficit
The report noted that "services exports remained a key pillar of external sector stability, with the services surplus rising from USD 47.9 billion in Q1 to USD 60.4 billion in Q4, helping offset the merchandise trade deficit."
India's services exports are increasingly narrowing the gap with merchandise exports. In FY2026, services exports stood at USD 421 billion, compared with merchandise exports of USD 442 billion.
India's global services export share grows
India remained the world's eighth-largest services exporter in 2025, with its worldwide services imports nearly doubling from USD 5.1 trillion in 2015 to USD 9.6 trillion in 2025. During the same period, India's exports almost tripled from USD 156 billion in 2015 to USD 416 billion in 2025. "India's CAGR is 10.3%, outperforming the global average growth of 6.6%," the report said.
Telecom, IT, and pharmaceutical exports strengthen
India strengthened its position in telecom and IT services, with its global share increasing from 9.5% to 14.9%. Additionally, India's services export markets have become more diversified, with North America's share declining from 60% to 54%, while Europe's share increased from 25% to 33%.
In pharmaceuticals, India strengthened its position in formulated drugs (HS 3004), with its global export share increasing from 3.2% to 4% between 2015 and 2025. India's pharmaceutical exports stood at USD 25.8 billion in 2025, with formulated drugs accounting for the majority at USD 22 billion.
