India’s trade momentum is showing encouraging signs of resilience despite ongoing global uncertainties. According to the Monthly Economic Review by the Department of Economic Affairs (DEA), India’s total exports (goods and services) rose 5.9% year-on-year in the first quarter of FY26 (April–June 2025). More significantly, core merchandise exports — which exclude petroleum and gems & jewellery — saw a stronger 7.2% YoY growth.
This growth highlights the sustained strength of India’s external sector amid shifting global trade dynamics.
Key Highlights:
- Core merchandise exports up 7.2% YoY, showing robust non-oil, non-gold export strength.
- Total exports (goods & services) rose 5.9% YoY in Q1 FY26.
- Forex reserves remain healthy, providing over 11 months of import cover, reinforcing economic stability.
- The Indian Rupee maintained stability in June 2025, despite oil price fluctuations and geopolitical unrest in the Middle East.
- UNCTAD reported a global trade rebound in Q2 2025 after a slowdown in Q1, driven mainly by developed economies.
- Trade Policy Uncertainty Index fell by 35% from April to June 2025, indicating improving global trade sentiment.
- Countries worldwide are:
- Increasing bilateral negotiations to resolve trade disputes.
- Diversifying supply chains and encouraging domestic manufacturing in key sectors.
Global Trade Context:
The broader global trade environment remains cautious but stable. While the first half of 2025 saw a USD 300 billion increase in trade value, growth was uneven — with developed nations leading and developing countries showing weaker performance.
Nations are actively countering trade volatility by:
- Promoting self-reliance in critical industries.
- Expanding supplier bases across geographies to minimize disruptions.
- Engaging in strategic bilateral trade agreements to navigate the complex global economic landscape.
India’s steady export growth, stable currency, and strong forex reserves position it favorably amid an increasingly fragmented world economy. The coming quarters will be crucial in determining whether this resilience translates into sustained momentum for FY26.
