India Records Highest Ever Quarterly Exports Despite Widening Trade Deficit

India recorded its highest-ever overall quarterly exports for a first quarter, totaling $232.73 billion during the April-June period of FY2026-27. This growth was driven by strong performance in engineering goods, gems and jewelry, electronics, and chemicals, with the United States remaining the largest export destination. In June 2026 alone, merchandise exports rose 15.5% year-on-year to $40.41 billion.

Despite the export surge, the merchandise trade deficit widened by approximately 59% to $30.43 billion in June, a five-month high. This was caused by a 31% spike in imports to $70.84 billion, primarily driven by crude oil, electronics, and gold. Rajesh Agarwal, the Commerce Secretary, attributed the rise to higher global prices influenced by geopolitical situations and increased domestic consumption. Analysis from Dolat Capital further noted that inventory restocking following the closure of the Strait of Hormuz contributed to the import surge.

Sectoral performance was mixed. The Confederation of Indian Textile Industry reported that while textile exports grew 9.64% in June, apparel exports declined by 11.25%. On the diplomatic front, Rajesh Agarwal stated that negotiations for an India-US framework trade deal are progressing positively and the agreement is ready for signing at an appropriate time. India also expects a UK free trade pact this month and a potential EU agreement by early next year.