India’s combined exports of goods and services reached $399.27 billion in April to August 2026, up 15.55% from last year, the Ministry of Commerce and Industry reported on 15 September 2026. In August alone, combined exports rose 25.41% to $82.68 billion, while the overall trade deficit narrowed to $9.41 billion. The surge was led by electronics, petroleum products and engineering goods, with export growth beating import growth for the first time in both value and percentage terms.
What Is Trade Deficit?
Trade deficit is the gap when a country’s imports of goods and services are higher than its exports in a given period. In India, the Ministry of Commerce and Industry measures it monthly for merchandise and services combined. A smaller deficit means exports grew faster than imports.
The opposite situation is a trade surplus, where exports are higher than imports. The common term for both outcomes is the trade balance, which is simply exports minus imports. If the result is negative, it is called a deficit. If it is positive, it is called a surplus.
In August 2026, India’s combined exports were $82.68 billion and combined imports were $92.09 billion. The difference between them, $9.41 billion, was India’s overall trade deficit for the month. This deficit was lower than the $11.62 billion deficit in August 2025, because exports grew at 25.41% while imports grew at a slower 18.75%.
A trade deficit is not the same as a fiscal deficit or a current account deficit. Fiscal deficit relates to government income and spending. Current account deficit is a wider concept tracked by the Reserve Bank of India, and it includes the trade balance in goods and services plus income from abroad and money sent home by Indians working overseas.
India Trade Performance in April to August 2026
The Ministry of Commerce and Industry released the trade estimates for August 2026 on 15 September 2026. The data covers the first five months of financial year 2026-27, which runs from April 2026 to March 2027. It includes both merchandise trade, which means physical goods, and services trade, which means software, transport, business and other services.
During April to August 2026, India’s combined exports reached $399.27 billion, compared to $345.55 billion in the same period last year. This is a growth of 15.55%. Combined imports during the same five months were estimated at $459.65 billion, up 18.01% from $389.49 billion last year. As imports grew faster than exports over the five month period, the overall trade deficit widened to $60.38 billion from $43.94 billion a year ago.
| India Foreign Trade | April to August 2026 | April to August 2025 | Growth |
|---|---|---|---|
| Combined exports | $399.27 billion | $345.55 billion | 15.55% |
| Combined imports | $459.65 billion | $389.49 billion | 18.01% |
| Overall trade balance | minus $60.38 billion | minus $43.94 billion | Deficit widened |
| Merchandise exports | $215.91 billion | $183.21 billion | 17.85% |
| Merchandise imports | $363.00 billion | $307.09 billion | 18.21% |
| Merchandise deficit | minus $147.09 billion | minus $123.88 billion | Deficit widened |
The August monthly picture was stronger. Combined exports in August 2026 touched $82.68 billion, against $65.93 billion in August 2025. Combined imports rose to $92.09 billion from $77.55 billion. Because monthly export growth at 25.41% was higher than import growth at 18.75%, the monthly overall deficit fell to $9.41 billion from $11.62 billion. Commerce Secretary Rajesh Agrawal noted that this was the first time export growth had crossed import growth in both percentage and absolute value terms.
What Is Merchandise Export?
Merchandise exports are physical goods shipped from India to buyers in other countries, such as phones, refined fuel, machines, medicines and clothes. The Directorate General of Commercial Intelligence and Statistics in Kolkata records them. Services exports, by contrast, are invisible earnings from software, transport and business services.
Merchandise exports in August 2026 stood at $43.81 billion, up 26.12% from $34.74 billion in August 2025. Merchandise imports rose at a slower pace of 14.1% to $70.67 billion from $61.96 billion. As a result, the merchandise trade deficit for August narrowed to $26.86 billion, a five month low. Officials said volumes also rose in most product groups, so the rise was not only due to higher prices or a weaker rupee.
| Major Export Driver in August 2026 | Value in August 2026 | Growth Over August 2025 |
|---|---|---|
| Electronic goods | $5.55 billion | 89.82% |
| Petroleum products | $6.81 billion | 63.27% |
| Engineering goods | $12.32 billion | 24.86% |
| Organic and inorganic chemicals | $2.80 billion | 16.38% |
| Cotton yarn, fabrics and handloom products | $1.12 billion | 13.79% |
Other goods with strong growth in August included iron ore at 126.3%, meat, dairy and poultry products at 37.08%, marine products at 27.76%, plastics at 18.92% and coffee at 17.08%. Drugs and pharmaceuticals grew 3.84%, while gems and jewellery grew 0.69%. Non petroleum exports rose to $37.00 billion in August from $30.57 billion last year, which shows strength beyond oil. On the import side, gold imports fell sharply by 57.75% to $2.3 billion from $5.44 billion, which helped contain the deficit.
Services Exports Continue Strong Growth
Services exports mean income earned from selling services abroad, such as software support, business consulting, transport, travel and finance. India is one of the largest exporters of such services in the world, with strength in information technology and professional services. These earnings are important because they offset a large part of the deficit in physical goods.
In August 2026, services exports were estimated at $38.87 billion, up 24.61% from $31.19 billion in August 2025. Services imports were estimated at $21.42 billion, up from $15.59 billion, which is a faster rise of about 37%. Even with faster import growth, services gave a surplus of $17.45 billion for the month. The Reserve Bank of India releases final services data with a delay of about a month, so the August services figures are quick estimates based on July collections.
During April to August 2026, services exports touched $183.36 billion, compared to $162.34 billion last year, a growth of 12.95%. Services imports during the same period were $96.65 billion against $82.40 billion last year. The services surplus for the five months stood at $86.71 billion, higher than $79.94 billion a year ago. This surplus cushioned the merchandise deficit of $147.09 billion and kept the combined deficit at $60.38 billion.
Direction of Exports and Sources of Imports
The United States stayed India’s top export market in August 2026, with shipments rising 21.83% to $8.32 billion. Exports to China jumped 52.35% to $1.84 billion, while exports to Singapore rose 160.96%, Spain rose 196.47% and Tanzania rose 214.52%. For the full April to August period, Singapore led with growth of 96.56%, followed by China at 38.71%, the United States at 6.17%, Tanzania at 129% and Malaysia at 75.4%. The spread across America, Europe, Africa and Asia shows demand was broad and not limited to one region.
| Flow in August 2026 | Leading Partners | Trend |
|---|---|---|
| Top export destinations by growth | US up 21.83%, Singapore up 160.96%, Spain up 196.47%, China up 52.35%, Tanzania up 214.52% | Strong demand in developed and emerging markets |
| Top import sources by growth | US up 65.78%, Russia up 43.82%, China up 17.07%, Oman up 157.45%, Taiwan up 108.31% | Energy and electronics drove inflows |
| Largest import source | China at $12.78 billion in August | Up about 17% from last year |
| Crude led imports from Russia | Russia at $6.96 billion in August | Up nearly 44% on oil purchases |
China continued as India’s largest source of imports at $12.78 billion in August, up about 17%. Imports from Russia rose 43.82% to $6.96 billion, mainly due to crude oil. Imports from the United States rose 65.78%, while imports from Oman rose 157.45% and Taiwan rose 108.31%. For April to August, imports from Russia grew 56.69%, China grew 27.01%, the United States grew 29.6%, Oman grew 190.63% and Brazil grew 159.83%.
India Has Trade Surplus With Which Countries?
India records a trade surplus with the United States, the Netherlands, the United Kingdom, Bangladesh and several other markets where its exports exceed imports. The surplus with the United States was $34.41 billion in 2025-26. India runs a large deficit with China, Russia and the Gulf suppliers of crude oil.
In 2025-26, India exported goods worth $87.31 billion to the United States and imported goods worth $52.90 billion from that country. This left a surplus of $34.41 billion, lower than $40.88 billion in 2024-25 because imports from America grew faster. India exported goods worth $19.48 billion to China in the same year, up 36.7%, but imported goods worth $131.63 billion from China. This large gap explains why India’s overall merchandise deficit stays high even when exports to America and Europe do well.
Institutional Framework Behind India Trade Data
The Ministry of Commerce and Industry is the nodal ministry for foreign trade. It releases monthly quick estimates of exports and imports through the Department of Commerce. Physical goods data comes from the Directorate General of Commercial Intelligence and Statistics, which is based in Kolkata. Services data comes from the Reserve Bank of India, which is headquartered in Mumbai and was established in 1935 under the Reserve Bank of India Act, 1934.
The Directorate General of Foreign Trade, usually called the DGFT, puts trade policy into action. The DGFT is an attached office of the Ministry of Commerce and Industry and is headed by the Director General of Foreign Trade. Its headquarters is at Vanijya Bhawan on Akbar Road in New Delhi. It works through a network of 24 regional offices, including offices in Mumbai, Indore, Chennai, Bengaluru, Hyderabad, Kolkata and Ahmedabad. These offices issue the Importer Exporter Code, which every business needs to import or export, and they monitor export obligations.
India’s trade is guided by the Foreign Trade Policy 2023. The policy aims to raise exports to $2 trillion by 2030 through support for e commerce, districts as export hubs, duty relief on inputs and easier processes. It replaced the earlier five year policy cycle with a flexible framework that can be updated when needed. The India Trade Portal and department dashboards give product wise and country wise breakups that help businesses find demand in markets such as the United Kingdom, where interest in Indian goods has risen sharply in recent months.
Why Trade Numbers Matter for External Sector
A lower monthly deficit reduces pressure on the current account and on foreign exchange reserves. The current account records trade in goods and services along with income and transfers. When the merchandise deficit widens, a strong services surplus and money sent home by Indians abroad help balance the account. In April 2026, for example, India posted a current account surplus of $4.7 billion because services receipts and transfers were strong.
Strong export growth also supports jobs and factory output. Engineering goods, electronics, textiles, chemicals and pharmaceuticals employ large numbers of workers. Electronics exports have boomed on mobile phone shipments, while petroleum exports reflect India’s large refining capacity. Commerce and Industry Minister Piyush Goyal has set a goal of $1 trillion in combined goods and services exports in 2026-27, with hopes that goods alone may cross $500 billion for the first time.
The risks lie on the import side. Crude oil, electronic goods, coal, fertilisers and vegetable oils can push the bill higher when global prices rise. Gold imports fell in August, which helped, but oil and electronics stayed firm. If export momentum in America, China, Singapore and the United Arab Emirates continues, and energy prices stay stable, India can keep the deficit in check while moving toward its annual export goals.
Key Takeaways
- India’s combined exports in April to August 2026 stood at $399.27 billion, up 15.55% from $345.55 billion last year.
- Combined exports in August 2026 were $82.68 billion, up 25.41%, while combined imports rose 18.75% to $92.09 billion.
- Merchandise exports in August 2026 grew 26.12% to $43.81 billion, led by electronic goods up 89.82% to $5.55 billion.
- The overall trade deficit in August 2026 narrowed to $9.41 billion from $11.62 billion, while the merchandise deficit eased to $26.86 billion.
- Services exports in August 2026 reached $38.87 billion, giving a monthly services surplus of $17.45 billion.
- The DGFT, headquartered at Vanijya Bhawan in New Delhi, implements the Foreign Trade Policy 2023 through 24 regional offices.
