Exports may hit $1 Tn in FY27 on new trade deals, tariff cuts

Buoyed by its new trade agreements, India’s goods and services exports in FY27 could rise to a record $1,000 billion in 2026-27, exporters said, as they expect orders to flow in with the US lowering tariffs on India to 18% from 50%.

“Orders have begun coming in for chemicals, shoes and marine products. We expect more orders to come in the next 10-15 days. India’s exports in FY27 could rise to $1,000 billion,” said S C Ralhan, president, Federation of Indian Export Organisations (FIEO).

With the trade deal with the US likely to be implemented soon, exporters are hopeful of using the tariff differential with competitors to their advantage. The pact with the EU is also likely to come into effect by the end of this year. India and the US have finalised a framework for signing the first phase of the bilateral trade agreement wherein the US has agreed to reduce the 25% reciprocal tariffs on Indian goods to 18%. Washington has also eliminated the punitive 25% tariffs imposed for purchasing Russian crude oil.

“We have only 3% share in the US while China has 35% share, but China has a higher tariff of 34%. We expect orders to come in but we don’t have that much capacity,” said Council for Leather Exports chairman Ramesh Juneja, adding that more than 50% exports of India’s leather and footwear is to the EU. The council expects the extant ₹18,000 crore exports of leather products to increase 30% in first year and another 50% after that on expected foreign investment in India. India’s goods and services exports in April-December 2025 is estimated at $634.26 billion, up 4.3% on-year.

Manu Gupta, chairman, Toy Association of India said that two-third of the global transaction of toys happens in the US and more handmade toys which are labour intensive in nature like stuff toys and wooden toys where manual hand finishing is required may be prioritised over countries.

Though the US has agreed to lower the reciprocal tariff to 18%, issues such as when it will be implemented and the clauses related to oil purchases need clarity, exporters said. These could be taken up at a meeting with commerce and industry minister Piyush Goyal on Wednesday. The meeting assumes significance in the wake of India finalising trade pacts with the US and the EU.