Imports grew 17.28% during April-July, outpacing the 13.16% rise in exports; merchandise trade deficit widened to US$118.60 billion

Pooja Srivastava | Anytime News Network

New Delhi. India’s latest foreign trade figures present a worrying side of the country’s external trade story. While exports have registered healthy growth, imports are rising at a significantly faster pace, putting additional pressure on the trade balance.

During April-July 2026-27, India’s combined merchandise and services exports increased 13.16% to an estimated US$316.42 billion, compared with US$279.63 billion during the same period last year. However, total imports jumped by 17.28% to US$365.85 billion, widening the gap between exports and imports.

As a result, India recorded a total trade deficit of US$49.43 billion during April-July 2026-27, compared with US$32.32 billion in the corresponding period of 2025-26. The deficit therefore increased by more than US$17 billion in just four months.

The merchandise trade picture is even more concerning. Merchandise exports stood at US$173.78 billion, while merchandise imports surged to US$292.38 billion. This resulted in a merchandise trade deficit of US$118.60 billion, up sharply from US$96.66 billion a year earlier.

The pressure was also visible in July. India’s total exports were estimated at US$80.14 billion, while imports reached US$95.16 billion, leaving a monthly trade deficit of US$15.03 billion. The deficit was higher than the US$11.43 billion recorded in July 2025.

The merchandise gap remained particularly wide. Merchandise exports in July stood at US$44.24 billion, against imports of US$76.22 billion. In other words, the value of goods entering India substantially exceeded the value of goods being shipped overseas.

There were strong performers on the export front. Petroleum product exports rose 67.64%, electronic goods increased 57.40%, and engineering goods grew 17.71%. However, the rise in exports has not been sufficient to offset the much faster expansion in imports.

Import dependence remains another pressure point. During April-July, imports from Russia increased 59.65%, China 29.68%, while imports from Oman surged by a striking 200.68%. Imports from the United States and Brazil also recorded significant growth.

The services sector provided some relief. Services exports during April-July were estimated at US$142.64 billion, generating a services trade surplus of US$69.17 billion. However, the strong services surplus has not been enough to neutralize the widening merchandise trade gap.

The central concern emerging from the data is clear: India’s exports are growing, but imports are growing faster. If this trend continues, the expanding trade deficit could place greater pressure on the country’s external balance.

Therefore, the latest figures cannot be viewed only through the lens of export growth. The bigger challenge is to accelerate exports, strengthen domestic manufacturing, reduce excessive import dependence and contain the widening trade deficit.