India’s exports hit record high, but faster imports widen trade deficit to $15 billion in July

India’s trade deficit widens 31.5 per cent to $15.03 billion in July as merchandise exports hit record high. India’s overall trade deficit widened 31.5 per cent year-on-year to $15.03 billion in July 2026, as imports grew faster than exports despite merchandise shipments reaching a record high for the month, according to data released by the Commerce Ministry.

Overall exports of goods and services rose 13.3 per cent to $80.14 billion in July, compared with $70.72 billion in the same month last year. However, imports increased at a faster pace of 15.8 per cent to $95.16 billion from $82.16 billion a year earlier.

As a result, the overall trade deficit expanded from $11.43 billion in July 2025 to $15.03 billion in July this year.

The merchandise export sector was a key bright spot. Goods exports jumped 19.63 per cent to $44.24 billion in July from $36.98 billion a year ago. The figure marks India’s highest-ever merchandise export value for July, surpassing the previous record of $38.34 billion recorded in July 2022.

However, merchandise imports also rose sharply, increasing 17.52 per cent to $76.22 billion in July from $64.86 billion in the year-ago period.

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Services continued to provide support to India’s external trade position. Services exports were estimated at $35.89 billion in July, up from $33.74 billion in July 2025. Services imports stood at $18.94 billion, compared with $17.30 billion a year earlier.

The broader April-July picture shows a similar trend, with exports growing strongly but imports expanding at a faster pace.

India’s overall exports during April-July 2026-27 rose 13.16 per cent to $316.42 billion from $279.63 billion in the corresponding period last year. Overall imports, however, climbed 17.28 per cent to $365.85 billion from $311.94 billion.

This pushed the cumulative overall trade deficit to $49.43 billion during the first four months of the financial year, sharply higher than the $32.32 billion deficit recorded in the year-ago period. The increase stood at 52.97 per cent.

Merchandise exports during April-July rose 17.04 per cent to $173.78 billion, while merchandise imports increased 19.27 per cent to $292.38 billion.

India also recorded stronger merchandise exports to key markets. Shipments to China rose to $7.78 billion during April-July from $5.72 billion a year earlier. Merchandise exports to the United States increased marginally to $34.49 billion from $33.48 billion.

The July data therefore presents a mixed picture for India’s external sector. Record merchandise exports indicate strong overseas demand and improving export momentum, but the faster rise in imports means the trade gap continues to widen. The key trend to watch will be whether the pace of export growth can sustain itself in the coming months while moderating import growth helps contain pressure on the overall trade balance.