Exports rise 15 per cent in Apr-Jun 14 despite global uncertainties, says Piyush Goyal
India's merchandise exports registered approximately 15% growth in April–June 2026 compared to the same period a year earlier, defying global trade headwinds...
What Happened
- India's merchandise exports registered approximately 15% growth in April–June 2026 compared to the same period a year earlier, defying global trade headwinds including significant US tariff actions.
- May 2026 set a monthly record: merchandise exports rose to USD 45.2 billion (up 18% year-on-year), the highest ever monthly goods export figure, and a six-month high.
- Total exports (merchandise + services combined) reached USD 162.69 billion in April–May 2026–27, registering 14.66% growth year-on-year.
- Key sectors driving growth: petroleum products, engineering goods (up ~24.5% to USD 12.3 billion in May), electronics, pharmaceuticals, chemicals, and gems and jewellery.
- The strong export performance came despite US tariff impositions — India navigated the headwind partly through market diversification and a weaker rupee that improved export competitiveness.
Static Topic Bridges
India's Export Architecture — Key Sectors and Policy Levers
India's merchandise export base has diversified significantly over the past decade. The share of high-value manufactured goods (engineering, electronics, pharma, chemicals) has grown relative to commodity exports.
- Engineering goods: India's largest merchandise export category; includes machinery, auto components, capital goods, steel products; USD 12.3 billion in May 2026 (24.5% YoY growth)
- Petroleum products: Refined petroleum is India's second-largest export; India refines crude and re-exports as diesel, naphtha, jet fuel; large customers include Europe, Southeast Asia
- Pharmaceuticals: India is the world's largest supplier of generic drugs; exports to 200+ countries; supplies ~20% of global generic medicine volume; "pharmacy of the world"
- Electronics: Fast-growing segment; Apple iPhone manufacturing in India (Tata Electronics, Foxconn) driving electronics export growth; PLI scheme a key enabler
- Gems and Jewellery: Historically India's top export; Surat (diamonds) and Jaipur (coloured gems) are global hubs; US and UAE are primary markets
- Export policy instruments: Export Credit Guarantee Corporation (ECGC) for risk cover; Duty Drawback scheme for rebating taxes on inputs; RoDTEP (Remission of Duties and Taxes on Exported Products) replaces MEIS
Connection to this news: The April–June 2026 surge was driven by engineering goods and petroleum products — the two sectors that reflect India's growing industrial capacity — alongside electronics, where PLI-driven production is scaling.
Production-Linked Incentive (PLI) Scheme and Export Competitiveness
The PLI scheme provides financial incentives to manufacturers based on incremental sales/production above a base year. It covers 14 sectors including electronics, pharmaceuticals, textiles, specialty steel, auto components, food processing, and more.
- Total outlay: approximately ₹1.97 lakh crore across 14 sectors
- Key PLI-driven export stories: Electronics (Samsung, Apple ecosystem), Pharma APIs, Solar modules, Specialty steel, ACC batteries
- Apple iPhone exports from India crossed USD 17 billion in FY 2025–26, making India a significant supplier to global iPhone supply chains
- PLI for textiles (Man-Made Fibres and Technical Textiles): addresses India's historical weakness in synthetic textile exports relative to Bangladesh and Vietnam
- PLI for White Goods (ACs and LEDs): aims to replicate India's pharma export success in consumer electronics manufacturing
Connection to this news: Electronics export growth is a direct PLI outcome. The 15% overall export growth in Q1 FY27 reflects multiple PLI sectors simultaneously scaling production and exports — a structural, policy-driven shift rather than a commodity price bounce.
US Tariffs and India's Trade Navigation Strategy
The United States imposed significant tariff increases beginning in 2025, affecting multiple countries and product categories. India was not exempted from baseline tariff increases, though sector-specific negotiations were ongoing.
- US reciprocal tariff: In April 2025, the USA announced a universal 10% baseline tariff on all imports plus country-specific "reciprocal" tariffs; India faced a 26% tariff (later suspended for 90 days for most countries while negotiations proceeded)
- Impact on India: Sectors most exposed include gems and jewellery, pharmaceuticals, textiles, and engineering goods where the US is a primary destination
- India's response: Accelerating bilateral trade agreement negotiations with the US; diversifying export markets (EU, Middle East, Africa, ASEAN); leveraging PLI to improve cost competitiveness
- India's goods trade with USA: USA is India's largest merchandise export destination (approximately USD 85 billion in FY26)
- Despite tariff headwinds, India's engineering exports rose sharply — suggesting either tariff exemptions were secured for specific categories or demand remained inelastic
Connection to this news: The 15% export growth despite US tariffs is significant because it demonstrates that India's export base has sufficiently diversified across both sectors and geographies to absorb a single bilateral trade shock.
Current Account, Trade Deficit, and Balance of Payments
India structurally runs a merchandise trade deficit (imports exceed exports) but this is partly offset by a services trade surplus and large remittance inflows. The current account balance is the key metric for external sector health.
- India's merchandise trade deficit: typically USD 20–25 billion per month; exports at USD 45.2 billion (May 2026) vs imports at USD 73.4 billion = deficit of ~USD 28.2 billion in May alone
- Imports are dominated by: crude oil (~25–30% of import bill), gold, electronics (before PLI), coal, fertilisers
- Services surplus: India is a global leader in IT/BPO services exports; software and services exports reached ~USD 340 billion in FY26 — partially offsetting the goods deficit
- Remittances: India is the world's largest recipient; approximately USD 120 billion in FY26 from the diaspora — a critical source of forex
- CAD (Current Account Deficit): a deficit of 1–2% of GDP is considered manageable; higher deficits pressure the rupee and forex reserves
- Forex reserves: India's foreign exchange reserves stood at approximately USD 690–700 billion in mid-2026, providing a buffer of ~12 months of import cover
Connection to this news: The export surge narrows the merchandise trade deficit at the margin, but strong import growth (crude oil surging 53.8% to USD 22.67 billion in May) means the overall trade balance remains under pressure even as export performance improves.
Key Facts & Data
- India merchandise exports in April–June 2026: ~15% growth YoY (approximately USD 130 billion for the quarter)
- May 2026 merchandise exports: USD 45.2 billion — all-time monthly record; 18% YoY growth
- April 2026 merchandise exports: USD 43.56 billion
- Total exports (merchandise + services) April–May 2026: USD 162.69 billion; growth: 14.66% YoY
- May 2026 top sectors: petroleum products, engineering goods (USD 12.3 bn, +24.5%), electronics, pharmaceuticals, chemicals, gems and jewellery
- May 2026 merchandise imports: USD 73.41 billion; crude oil imports: USD 22.67 billion (+53.8%)
- May 2026 trade deficit: approximately USD 28.2 billion
- Apple iPhone exports from India FY26: USD 17 billion+
- PLI scheme total outlay: ₹1.97 lakh crore across 14 sectors
- USA is India's largest merchandise export destination; US "reciprocal tariff" on India: 26% (announced April 2025; later suspended pending negotiations)
- India's forex reserves (mid-2026): approximately USD 690–700 billion
- Remittances received FY26: approximately USD 120 billion (world's largest recipient)