Trade Deficit Narrows as Merchandise Exports Reach $38.51 Billion
India’s merchandise exports increased 11.4% year-on-year to $38.51 billion in August 2026, supported by stronger shipments of engineering goods, electronics and pharmaceuticals, according to provisional data released by the Commerce Ministry.
Imports also increased during the month, rising 6.2% to $61.59 billion, but the faster pace of export growth helped narrow the country’s merchandise trade deficit.
The trade deficit stood at $23.08 billion in August, compared with $24.3 billion during the same month a year earlier.
Engineering goods remained a major contributor to India’s export performance, with shipments increasing 8.9% to $10.4 billion.
Electronics recorded substantially stronger growth, with exports jumping 39.6% year-on-year to $4.38 billion. Pharmaceutical exports also increased 6.7% to $2.45 billion.
However, performance varied across sectors. Gems and jewellery exports declined 15.2% to $1.7 billion, reflecting weaker shipments from one of India’s traditionally important export categories.
During the April-August period of FY27, India’s merchandise exports increased 5.8% to $190.2 billion, while imports grew 7.1% to $305.6 billion.
The cumulative merchandise trade deficit for the first five months of the fiscal year consequently stood at approximately $115.4 billion.
The latest trade figures indicate continued momentum in several manufacturing-linked export categories, particularly electronics and engineering goods, even as India’s overall import bill remains significantly higher than merchandise export earnings.
The performance of these sectors, along with movements in global commodity prices and demand across major overseas markets, will remain important factors shaping India’s trade position during the remainder of the fiscal year.
