India Sees 25 Percent Surge in Exports to Free Trade Partner Nations in Q1

India's merchandise exports to Free Trade Agreement partner countries expanded by 25 percent to reach 43.14 billion dollars in the first quarter of FY 2026-27, driven by strategic trade pacts and industrial incentive schemes.

India's foreign trade strategy has delivered substantial results in the opening quarter of FY 2026-27, as merchandise shipments to countries with which India shares Free Trade Agreements expanded by 25 percent. Data submitted to the Rajya Sabha reveals that goods exports to trade partner nations surged to 43.14 billion dollars during the April to June quarter, climbing from 34.65 billion dollars recorded in the corresponding timeframe of the previous fiscal year. This marked growth underlines the tangible benefits of long term trade negotiations and market integration efforts.

Surge in Overall Merchandise Shipments and Partner Market Share
The expansion in exports to partner nations outpaced the nation's overall export growth rate during the same period. Total merchandise shipments across all global destinations rose by 16 percent, moving from 111.57 billion dollars in the April to June quarter of the previous year to 129.32 billion dollars in the first quarter of the current fiscal year. Consequently, the proportion of shipments bound for Free Trade Agreement partners within India's total export basket expanded significantly, rising from 31.1 percent in the previous year's first quarter to 33.4 percent in the current period.

Administrative metrics also reflect the heightened trade activity under these agreements. The issuance of Certificates of Origin, which validate the domestic origin of exported goods to claim preferential tariff treatment, has doubled over a five year span. The total number of issued certificates jumped from 3.6 lakh five years ago to 7.8 lakh in recent counts, highlighting deeper utilization of trade privileges by Indian exporters.

Long-Term Export Milestones and Service Sector Dominance
According to updates from the Ministry of Commerce, the strategic emphasis on preferential trade deals has established a structured framework for setting international trade agendas. Historical performance figures demonstrate a consistent upward trajectory, with total combined exports of goods and services reaching a record landmark of 863 billion dollars in FY 2025-26. This represents a substantial increase compared to the total export value of approximately 676 billion dollars recorded in FY 2021-22.

A detailed four year evaluation highlights a remarkable transformation within the export composition, where the service sector demonstrated accelerated momentum relative to merchandise trade. Between FY 2021-22 and FY 2024-25, merchandise exports grew moderately from 422 billion dollars to around 442 billion dollars. In contrast, service sector exports experienced rapid expansion, surging from 254.53 billion dollars to 421.29 billion dollars over the same four year period, closing the gap with physical goods exports.

Production-Linked Incentive Scheme Drives Industrial Capacity
Domestic manufacturing policies have worked in tandem with trade agreements to enhance export capabilities. The Production Linked Incentive scheme has played a pivotal role in boosting domestic production efficiency and expanding exportable surpluses. As of March 31, 2026, the scheme has been rolled out across 14 manufacturing sectors.

Under this initiative, a total of 892 applications have received official approval. The program has successfully catalyzed capital investments amounting to 2.40 lakh crore rupees across participating industries, strengthening India's manufacturing backbone and positioning domestic producers to capitalize on preferential access in partner markets.

What this means for you
Across India: Increased exports to FTA partners will boost domestic manufacturing activities and generate employment opportunities.

For Businesses and Exporters: Preferential trade access alongside 2.40 lakh crore rupees in PLI investments enhances the global competitiveness of Indian products.

Questions & Answers

1. What was the value of exports to FTA partner countries in Q1 of FY 2026-27?
Merchandise exports to FTA partner nations grew by 25 percent to reach 43.14 billion dollars in the April to June quarter, up from 34.65 billion dollars in the same period last year.

2. How much did India's overall merchandise export grow in the first quarter?
India's overall merchandise exports increased by 16 percent to 129.32 billion dollars in Q1, compared to 111.57 billion dollars in the corresponding quarter of the previous year.

3. What is the share of FTA countries in India's total merchandise export?
The share of FTA partner countries in India's total merchandise exports rose from 31.1 percent in the previous year's first quarter to 33.4 percent in Q1 of FY 2026-27.

4. How has the issuance of Certificates of Origin performed over 5 years?
The number of Certificates of Origin issued to exporters has doubled over the past 5 years, rising from 3.6 lakh to 7.8 lakh.

5. What investments have been achieved under the PLI scheme?
As of March 31, 2026, the PLI scheme across 14 sectors approved 892 applications and generated 2.40 lakh crore rupees in total investment.

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