India's Trade Deficit Narrows as August Exports Surge 25%

The Government of India reported a narrowing of its overall trade deficit to $9.41 billion in August 2026, down from $11.62 billion the previous year. Total exports surged 25.4% to $82.68 billion, while total imports rose 18.75% to $92.09 billion. The merchandise trade deficit specifically fell to $26.86 billion, a significant decrease from approximately $32 billion in July.

Growth was driven by a 26.1% increase in merchandise exports, led by electronic goods, which jumped 89.82%, and petroleum products, which grew 63.27%. Commerce Secretary Rajesh Agrawal attributed this expansion to strong demand for engineering goods, chemicals, and textiles from the US, EU, and BRICS economies. India saw massive export growth to Singapore, which surged over 97%, as well as increases in shipments to China and the United States.

Import trends showed a sharp 57.7% decline in gold imports to $2.3 billion, following appeals from Prime Minister Narendra Modi to conserve foreign exchange. However, overall merchandise imports still rose 14.1% to $70.67 billion, fueled by energy and electronic goods.

Despite these monthly gains, the five-month merchandise trade deficit from April to August widened to $147.09 billion compared to $123.88 billion in the previous year. The government has operationalized a trade deal with the United Kingdom and is negotiating a pact with the United States following the imposition of a 10% tariff on Indian imports in July.