India Trade Balance Narrows Slightly

The merchandise trade deficit in India $30.2 billion in September of 2026, narrowing slightly from the $32.2 billion in the corresponding period of the previous year as a weak rupee limited India's purchasing power for foreign goods in dollar terms. Exports jumped by 22% from the previous year to $44.4 billion, the highest on record for the month of September. Meanwhile, imports rose by 8.9% to $74.6 billion, remaining below record highs despite the surge in oil prices that Indian refineries face. The rupee repeatedly tested record lows in the period, refraining from depreciating further due to intervention by the RBI and signals of a rate hike.

The merchandise trade deficit in India was at $26.86 billion in August of 2026, remaining stable when compared to the $26.68 billion in the corresponding period of the previous year despite the turbulent macroeconomic backdrop in the September quarter. Imports rose by 14.7% annually to $70.67 billion, lifted by soaring energy costs that Indian importers face as the war in the Middle East and capacity cuts for Russian refiners hampered supply from importers. Meanwhile, exports rose by 25.5% to $43.81 billion.

India’s trade deficit widened to $31.98 billion in July 2026, up from $27.5 billion in the same month of the previous year and surpassing market forecasts of $30.2 billion. It was the largest trade shortfall since January, as imports surged by 17.5% annually to an all-time high of $76.2 billion, partly reflecting higher oil, fuel, and coal prices amid fresh hostilities in the Middle East. Moreover, edible oil imports hit a 10-month high in July as refiners stocked up ahead of the August-November festival season, when demand usually peaks. Exports also advanced by a robust 19.6% to $44.2 billion, amid increased shipments of petroleum products, electronics, engineering goods, gems and jewellery, iron ore, meat, dairy and poultry products, and marine products.