India's trade deficit narrowed sharply to $9.41 billion in August 2026 from $11.62 billion in the same month last year, according to Commerce Secretary Rajesh Agrawal. The August performance was below the $32 billion expected by economists in a Reuters poll and lower than the $31.98 billion deficit recorded in July, demonstrating sustained improvement in India's trade balance. Agrawal emphasized that "the export growth momentum accelerated further in August" and noted that "overall trade deficit has also gone down substantially in the current August month", highlighting the positive development in both overall and merchandise trade deficits.
Overall exports, including merchandise and services, rose 25.41% year-on-year to an estimated $82.68 billion in August, compared with $65.93 billion in August 2025, as reported by the Commerce Ministry. Merchandise exports increased 26.12% in dollar terms to $43.81 billion from $34.74 billion a year earlier, while in rupee terms, merchandise exports rose 37.59% to ₹4.18 lakh crore from ₹3.04 lakh crore. Services exports were estimated at $38.87 billion, registering 24.61% year-on-year growth from $31.19 billion a year earlier. Commerce Secretary Rajesh Agrawal noted that the strong performance was being driven by "a dynamic mix of commodities and key partner countries," with engineering goods, petroleum products, chemicals and textiles performing well. The export surge was not merely value-led but also reflected higher volumes, with 68 of 168 principal commodities recording both volume and value growth.
India's exports to the US rose 21.83% to $8.4 billion in August 2026, while exports to China increased 52.35% to $1.9 billion, according to Commerce Ministry data. Imports from both countries also grew, with inbound shipments from China rising 17% to $12.77 billion and those from the US jumping 65.78% to $5.97 billion. Despite the US imposing an additional 10% tariff on Indian goods from July 24, exports to the US recorded year-on-year growth in August. Singapore exports jumped 160.96% to $1.9 billion during the month, with exports to Singapore during the first five months of the fiscal year jumping 96.56% to $9.5 billion. Exports to Germany, South Africa, Tanzania, Australia, Malaysia, Sri Lanka and Italy also recorded positive growth, while exports to the UAE fell 26.1% to $2.4 billion due to the West Asia crisis. Imports from Russia, Korea, Singapore, Germany, Oman, Malaysia, Taiwan, and Brazil increased, with imports from Oman, Taiwan, and Brazil surging 157.45%, 108.31%, and 132% respectively.
Services exports for the April-August 2026-27 period are estimated at $183.36 billion, representing a 12.95% growth over the same period last year, according to Business Standard. Services imports during the same period reached $96.65 billion, marking a 17.30% increase from the previous year. The services trade surplus for April-August 2026-27 stands at $86.71 billion, compared to $79.94 billion in April-August 2025-26. This indicates that while India's services exports are growing robustly, the growth in services imports is outpacing export growth, contributing to the overall trade deficit improvement.
