New Delhi, May 27 (PTI) The country's overall goods and services exports are expected to grow by over 21 per cent year-on-year to USD 1 trillion during 2025-26, apex exporters' body FIEO said on Tuesday.
In 2024-25, the exports aggregated at USD 824.9 billion.
Federation of Indian Export Organisations (FIEO) President S C Ralhan said the healthy growth may come on account of international buyers seeking to diversify their sourcing in the wake of global economic uncertainties.
The free trade agreements, which India is finalising would also help in pushing the country's outbound shipments, he said.
In 2025-26, merchandise exports are expected to grow 12 per cent to USD 525-535 billion from USD 437 billion in 2024-25, while services exports are likely to rise by about 20 per cent year-on-year to USD 465-475 billion from USD 387 billion in the last fiscal, Ralhan said.
All the major sectors are expected to show a significant jump in the shipments this fiscal, he said adding healthy growth is expected in electronics, engineering sector, chemicals, textile and clothing, pharma and even agriculture. Even the petroleum and gems and jewellery exports will be in a positive zone in the coming year.
Electrical and electronics' exports are expected to reach USD 60 billion in the current financial year, while machinery shipments may touch USD 40 billion.
Chemical exports are expected to reach USD 40 billion, pharmaceuticals (USD 30 billion), petroleum (USD 70 billion), apparel and madeups (USD 23-25 billion), gems and jewellery (USD 30-35 billion) and agriculture (USD 55 billion) in 2025-26, he said.
One of the key drivers that will enhance the electronics segment is the production linked incentive scheme.
Another factor will be the buyers - particularly in the US - looking beyond China for sourcing.
During May 14-19, Apple vendor Foxconn invested USD 1.48 billion or about Rs 12,800 crore in its India unit, as per the company's regulatory note.
It is not just Apple, many other companies are also looking at India and trade diversion from China will bring at least an additional USD 5 billion worth of opportunity, director general and chief executive officer of FIEO Ajay Sahai said.
Free trade pacts with the UK, European Free Trade Association (EFTA) and European Union (EU) will be aiding the efforts to increase exports.
The interim trade deal with the US that may exempt India from reciprocal tariffs itself could offer a big advantage over the competitors, Sahai said.
The gems and jewellery sector's exports aggregated at USD 29.8 billion last fiscal. The exports from the sector have been contracting in the past two years due to fall in demand and difficulty in sourcing natural diamonds.
However, he added despite the healthy outlook, some headwinds are expected to come from technical and non-tariff barriers.
The latest one facing the industry is the implementation of Digital Product Passport (DPP) that will be implemented by the EU from January 1, 2026.
It will be mandatory for a wide range of products, starting with sectors like electronics, batteries, textiles, and construction materials from January 1, 2026 with wider rollouts expected by 2030.
DPP aims to digitally record, store, and share information about a product's entire life cycle, from raw materials to manufacturing, usage, recycling, and disposal.
It may increase the compliance burden particularly for the exporters from the Micro, Small and Medium Enterprises (MSMEs).
"These are clearly protectionist measures," Sahai said.
Non-compliance with DPP requirements may lead to rejection of consignments or loss of competitiveness in the EU market, which is becoming increasingly sustainability-focused, Sahai said.
This DPP comes on the back of EU's carbon tax, deforestation regulations and Eco Design Sustainable Product Regulation, all of which will come into force from January 1, 2026.
He also said that issues pertaining to Red Sea and war between Russia-Ukraine and Israel-Hamas have ebbed and in fact ships have started moving from the Red Sea.