India’s overall trade deficit narrowed to $9.41 billion in August 2026 from $11.62 billion in the same month last year, as exports grew at a faster pace than imports, according to official trade data released on Tuesday.Overall exports, including merchandise and services, rose 25.41% year-on-year to an estimated $82.68 billion in August, compared with $65.93 billion in August 2025.Imports increased to $92.09 billion from $77.55 billion during the same period.Commerce secretary Rajesh Agrawal said the export growth momentum had accelerated further in August. “The export growth momentum accelerated further in August,” he said.
Merchandise exports rise 26.12%
Merchandise exports increased 26.12% in dollar terms to $43.81 billion in August, up from $34.74 billion a year earlier. In rupee terms, merchandise exports rose 37.59% to Rs 4.18 lakh crore from Rs 3.04 lakh crore.Merchandise imports also increased, rising to $70.67 billion from $61.96 billion in August 2025.This resulted in a merchandise trade deficit of $26.86 billion, lower than $27.20 billion a year earlier.Agrawal said the decline in both the overall and merchandise trade deficits was a positive development.Energy products, including petroleum, crude oil and coal, coke and briquettes, remained among the major contributors to the trade deficit during the first five months of the fiscal year. Electronic goods were another significant driver of import growth.
Services exports remain strong
Services exports were estimated at $38.87 billion in August, registering 24.61% year-on-year growth from $31.19 billion a year earlier.Services imports rose to $21.42 billion from $15.59 billion during the same period.Taken together, overall exports in rupee terms were estimated to have grown 36.81% year-on-year to Rs 7.89 lakh crore in August from Rs 5.77 lakh crore in August 2025.Gold imports, meanwhile, declined sharply to $2.3 billion in August from $5.4 billion a year earlier, registering a 57.7% fall.
Engineering, petroleum and chemicals drive exports
Agrawal said exports were being supported by a “dynamic mix of commodities and key partner countries”, with engineering goods, petroleum products, chemicals and textiles performing well.Electronic goods exports rose around 30% in the first five months of the fiscal year, while engineering goods exports increased by more than 20%.Exports of organic and inorganic chemicals rose 14%, while marine products grew by more than 14%, according to the commerce secretary.India also recorded stronger exports to several markets. Exports to China rose 39%, while those to Singapore increased by more than 97%, South Africa by 58% and Malaysia by more than 75%.Exports to BRICS countries grew 13.3% to $34.5 billion during the first five months, Agrawal said. He added that Indian exports had witnessed major demand from the US, European Union, Brics countries and other emerging economies.
April-August exports up 17.85%
During April-August of the current fiscal year, India’s merchandise exports rose 17.85% to $215.91 billion, while imports increased 18.21% to $363 billion.Agrawal said the increase in exports was not merely value-led and also reflected higher shipment volumes. Of the 168 principal commodities tracked, 68 recorded both volume and value growth, indicating that the increase was accompanied by higher manufacturing and shipment volumes.India is also seeking to diversify its export markets. Its trade deal with Britain is now in force, while a broader pact with the European Union is moving towards implementation, Reuters reported.The agreements could provide greater market access for Indian goods.Merchandise exports, however, declined from $44.24 billion in July to $43.81 billion in August, while merchandise imports fell from $76.22 billion to $70.67 billion, according to government data.The August merchandise trade deficit of $26.86 billion was below the $32 billion expected by economists in a Reuters poll and the $31.98 billion deficit recorded in July.Fresh strikes on Saudi Arabia and attacks on ships in the Gulf were also testing nerves in global markets, amid concerns over the wider Middle East conflict following an attack on a Saudi oil pipeline and an advance by Yemen’s Houthis.
