Exports to the US declined ~22% YoY on a high base: The exports to the US contracted for the second consecutive month, with the pace of the same widening to 21.8% in January 2026 (+38.9% in Jan 2025) from 1.8% in December 2025 (+8.3% in Dec 2024). This was mainly attributed to an unfavourable base of upfronted shipments during January August 2025 before the onset of tariff hikes. 

Going ahead, the FTA with the EU* and the interim trade deal with the US are likely to benefit certain sectors like textiles, chemicals, agricultural products, etc., and thereby support India’s export growth in the upcoming fiscal, although final details on the latter are awaited.

EXHIBIT: India’s merchandise export growth slowed to a three-month low of just 0.6% in January 2026 to $36.6 billion (+1.9% in December 2025; -2.6% in January 2025); this trails the YoY growth of 1.7% recorded in Q3 FY2026

Source: Ministry of Commerce and Industry, GoI; CMIE; ICRA Research