New Delhi [India], December 25 (ANI): A report by the Global Trade Research Initiative (GTRI) states that with 18 Free Trade Agreements (FTAs) already signed and more expected in 2026, India’s priority should shift from signing new deals to actually leveraging existing FTAs to boost exports, particularly in the electronics, engineering, and textiles sectors.
The report notes that India’s total exports in FY25 were USD 825 billion and are expected to increase only marginally to approximately USD 850 billion in FY26, reflecting a challenging global trade environment.
Merchandise exports are likely to remain stagnant in FY26 due to weak global demand and rising protectionism, while services exports could surpass USD 400 billion, providing the only significant support to India’s overall trade performance.
“With 18 FTAs already signed and more likely in 2026, India’s priority should shift from signing deals to actually leveraging FTAs to boost exports,” it states.
According to GTRI, India is entering the most challenging global trade environment in recent years in 2026.
Rising protectionism in developed economies, weak global demand, and new climate-related trade barriers are converging at a time when India is striving to increase exports.
Consequently, the outlook is less about expansion and more about the challenge of maintaining its current position.
The United States has emerged as a major pressure point. Under President Donald Trump, Washington bypassed World Trade Organization rules in favor of unilateral high tariffs.
Under the existing 50 percent tariff regime, India’s exports to the US fell by approximately 21 percent between May and November 2025. GTRI warned that unless the US withdraws the additional 25 percent penalty tariff linked to India’s purchases of Russian oil or reaches a trade agreement, India faces the risk of further declines in exports to its largest market.
Europe presents a different but equally costly challenge. The European Union is set to activate its Carbon Border Adjustment Mechanism (CBAM) on January 1, 2026, which will effectively impose a carbon tax on imports.
Even before payments begin, compliance and reporting requirements have already reduced India’s steel exports to the EU by approximately 24 percent. From 2026, EU importers will incorporate the CBAM cost into the price of Indian goods, and payments will be settled in 2027 by surrendering certificates.
Despite these difficulties, there are signs of resilience. The report noted that while exports to the US declined, India’s exports to the rest of the world increased by approximately 5.5 percent, indicating a gradual diversification of export markets.
With limited influence on global geopolitics, GTRI stated that India’s strategy for 2026 should focus on domestic factors. Export growth will depend on improving product quality, moving up the value chain, and reducing costs.
“In 2026,” the report concluded, “India’s trade performance will be determined less by external opportunities and more by domestic execution.”
