Resilient services may catch up with goods exports in FY26

June services exports are expected to post a multi-month high, bolstered by record output

- Rhik Kundu

The services sector is emerging as a vital export cushion, delivering robust growth and helping anchor India's external balance, as global headwinds weigh on merchandise exports.

At the current pace, services could catch up with merchandise exports in 2025-26, marking a significant structural shift in India's trade dynamics, showed figures shared by exporters.

In the first five months of 2025, services exports rose 16% year-on-year to $173 billion, while the services trade surplus surged 21% to $90 billion, according to data from the Union commerce ministry, offering crucial support to the current account at a time of volatility in the goods trade.

Merchandise exports slipped 1.4% to $192.53 billion, and the trade deficit widened nearly 15% to $106.88 billion during the same period.

The strong performance underscores the resilience of India's technology, consulting, financial, and business services, even as traditional goods trade remains vulnerable to a turbulent global landscape.