Key Points

Ratings agency CareEdge Ratings in the report forecasted an 8.2 per cent growth in services exports for FY26, adding that "India's services exports are likely to remain a key support for the external sector."

However, recent developments, such as the increase in H-1B visa fees and lingering global uncertainties, warrant close monitoring, the report said.

Further, gross foreign direct investment inflows rose 33 per cent year-on-year in the first four months of FY26. Net FDI inflows, after repatriations, rose 96 per cent to $21.4 billion during this period, the ratings agency said.

A sharp increase in inward FDI translated into net inflows (inflows less outflows) of $10.8 billion during this period, up from $3.5 billion a year ago, the report said.

India's non-petroleum exports held up relatively well, rising by 7.3 per cent (YoY) in the fiscal year so far, but a sharp contraction in petroleum exports weighed on the overall exports.

Manufacturing exports increased by a healthy 8.5 per cent buoyed by encouraging performance in exports of engineering goods (up 5.4 per cent) and electronic goods (up 39.8 per cent), the ratings agency said.

Within engineering goods, growth in the fiscal year so far was led by machinery and instruments (up 11.8 per cent) as well as ferrous and non-ferrous metals (up 6.4 per cent).

The key driver of strong growth in electronic goods was telecom instruments, which recorded a growth of 59 per cent in the fiscal year so far, the report noted.

According to the firm, global economic uncertainty stayed high in August 2025, while US economic and trade policy uncertainty eased from the highs of April 2025 as the US entered into trade deals with several economies.

- IANS