India's merchandise trade deficit narrowed marginally to $26.86 billion in August from $27.2 billion a year ago, as merchandise exports surged 26.1% year-on-year, outpacing the growth in imports.
According to data released by the Commerce Ministry, merchandise exports rose to $43.8 billion in August from $34.7 billion a year earlier. Merchandise imports, meanwhile, increased 14.1% to $70.6 billion from $61.96 billion.
Overall trade deficit, including services, narrowed to $9.41 billion in August from $11.62 billion in the corresponding period last year.
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The Commerce Secretary said India is seeing good momentum in export growth, with overall exports rising 25.4% to $82.7 billion in August from around $66 billion a year earlier. In rupee terms, export growth stood at 37.6%.
The strong performance was led by engineering goods, petroleum products, chemicals and textiles. Electronic goods and other manufacturing-linked segments also remained important contributors to India's export expansion.
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The Commerce Secretary said demand is coming not only from the US and UK but also from BRICS nations and other emerging economies, signalling increasing diversification in India's export markets.
India Crosses $400 Billion Export Mark
India's exports crossed the $400-billion mark during the first five months of FY27, registering growth of 15.5% over the corresponding period last year. The government has highlighted the diversification of India's trade basket and export destinations as a key factor supporting the momentum.
The US, UAE and China emerged as India's top export destinations in August. Other leading markets included Singapore, Germany, South Africa, Malaysia, Tanzania, Hong Kong, Australia, Spain and Sri Lanka.
On the import side, China, Russia and the US were India's top sources in August.
US, Japan And South Korea Exports Rise
India's merchandise exports to key Asian and Western markets also recorded strong growth. Exports to the US during April-August FY27 rose 6.2% to $42.8 billion. Exports to Japan increased 43% to $3.4 billion, while shipments to South Korea rose 22% to $3.2 billion.
India's exports to BRICS countries increased 13% to $34.5 billion during April-August FY27, highlighting the growing importance of emerging-market demand.
Engineering goods, petroleum products, electronic goods, chemicals and drugs were among India's leading export commodities during April-August FY27. On the import side, petroleum products, electronic goods, machinery and gold remained the country's key import commodities.
The trade deficit continues to be driven partly by India's strong domestic economic expansion, which is increasing demand for energy, machinery, electronics and other manufacturing inputs. Energy items such as coal briquettes and electronic goods remain significant contributors to the import bill.
India's gold imports stood at $2.3 billion in August.
Edible oil imports also remained substantial, with August vegetable oil imports rising to around 1.609 million tonnes, according to data from the Solvent Extractors' Association of India (SEA). Palm oil imports stood at 782,761 tonnes.
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