A record $825 billion in exports, a landmark EU trade deal, a PLI scheme that overshot its own investment target by 26%. Every headline number is real. The gap sits underneath them: in the first half of this fiscal year, merchandise exports grew 2.4% while services grew 6.5% — and almost every big new scheme this piece covers is aimed at the slower-growing half.
Trade · Policy · Exports
India's Trade Story Has Three Big Wins and One Gap the Headlines Skip
Published · v1.0.0 · Economic Survey 2025-26 · India-EU FTA, concluded 27 January 2026
The three wins
All real, all recent, all aimed substantially at goods trade.
The Export Promotion Mission, approved by Cabinet in November 2025 with a ₹25,060 crore outlay running FY2025-26 to FY2030-31, consolidates multiple export-support schemes into one digitally managed, outcome-linked framework run by the Directorate General of Foreign Trade. Its stated targets are MSMEs, first-time exporters, labour-intensive sectors and exporters based in non-traditional, low-export-intensity districts — and its trade-finance component, NIRYAT PROTSAHAN, offers interest subvention, export factoring, collateral guarantees and credit-enhancement support specifically to help smaller exporters diversify into new markets.
The India-EU Free Trade Agreement, concluded 27 January 2026, gives India preferential access across 97% of EU tariff lines, covering 99.5% of India's exports by value. Of that, 70.4% of tariff lines — 90.7% of India's export value — get immediate duty elimination, concentrated in exactly the labour-intensive sectors the Export Promotion Mission also targets: textiles, leather, footwear, tea, coffee, spices, sports goods, gems and jewellery, and marine products. A further 20.3% of tariff lines phase to zero duty over three to five years. In the other direction, India cuts car tariffs from 110% to as low as 10% over time, eliminates car-parts tariffs over five to ten years, and drops wine duties from 150% to 20–30% — while keeping dairy, cereals, poultry, soymeal and select fruits and vegetables protected.
Exhibit 1
The PLI scheme, four years into its FY2026 reporting
Cumulative figures across 14 sectors, as of 31 March 2026.
| Metric | Value | Unit |
|---|---|---|
| Approved outlay | 1.91 | ₹ lakh crore |
| Actual investment attracted | 2.40 | ₹ lakh crore |
| Jobs generated (direct + indirect) | 14.15 | lakh |
| Cumulative exports enabled | 15.2 | ₹ lakh crore |
| Same figure, at ₹85/US$ (31 March 2026) | 178.8 | US$ billion |
| Highest-investment sector: solar PV modules | 64,873 | ₹ crore |
| Second: pharmaceutical drugs | 45,158 | ₹ crore |
| Third: automobiles and auto components | 44,326 | ₹ crore |
Government of India figures as compiled in press coverage (Business Standard, A2Z Taxcorp, The Hawk), citing official PLI scheme reporting through 31 March 2026.
The PLI scheme has attracted 26% more investment than its own approved outlay — ₹2.40 lakh crore against ₹1.91 lakh crore — and generated cumulative exports of ₹15.2 lakh crore (US$178.8 billion at ₹85/US$, the approximate rate as of 31 March 2026) across its 14 sectors since inception. Every one of its three biggest sectors by investment — solar PV, pharmaceuticals, autos — is a goods-manufacturing category.
The gap: which half of exports is actually growing
Three headline wins for goods trade. The growth is in services.
India's exports hit a record US$825.3 billion in FY25 across goods and services combined, per the Economic Survey 2025-26. Services exports alone reached an all-time high of US$387.5 billion, up 13.6% year-on-year. Zoom into the most recent half-year and the split sharpens: in H1 FY26, combined goods-and-services exports grew 5.9% per the source figure (a weighted blend of the two segments below, not a simple average of the two percentages, and this piece has not independently re-derived it from the underlying dollar values) — but that headline number is doing a lot of work to smooth over a real divergence — merchandise exports grew just 2.4%, despite higher tariffs imposed by the United States, while services exports grew 6.5%. Over the longer run the same pattern holds at a structural level: India's share of global merchandise exports rose from 1% to 1.8% between 2005 and 2024, while its share of global services exports rose from 2% to 4.3% — the services share more than doubling, the goods share not quite doubling, from a smaller base gain in absolute percentage-point terms.
Sources. Export Promotion Mission outlay, structure and targets — PM India press release and IBEF/Drishti IAS/A2Z Taxcorp coverage of the November 2025 Cabinet approval; PIB's original release (PRID 2199733) could not be directly accessed (403 error). India-EU FTA terms — Ministry of Commerce & Industry release of 27 January 2026 (commerce.gov.in), as reported by KPMG, Lexology, Bajaj Finserv and the EU's own Intellectual Property Helpdesk news page; PIB's original release (PRID 2219065) could not be directly accessed. PLI scheme cumulative figures — Business Standard, A2Z Taxcorp and The Hawk, all citing official government reporting through 31 March 2026; PIB's original release (PRID 2230621) could not be directly accessed. Export growth and market-share figures — Economic Survey 2025-26, as summarised by IBEF, Insights on India and India Briefing; PIB's original Economic Survey highlights release (PRID 2219907) could not be directly accessed. Where this article relies on secondary reporting of a government release rather than the release itself, that is noted above.
About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.
