India's merchandise trade deficit widened to $34.7 billion in January 2026, driven by a surge in imports and only a marginal uptick in exports, according to the data shared by the Commerce Ministry on Monday.
In the same month last year, the trade deficit—the difference between imports and exports—stood at $25.4 billion. The surge was a result of 19.2% year-on-year rise in imports to $71.24 billion, whereas exports rose modestly by 0.6% YoY to $36.5 billion.
The United States remains India's top export destination, whereas China stays the top source of imports, the data showed. In the fiscal year so far, India shipped goods worth $72.46 billion to the US, higher by 6% as compared to $68.46 billion in the year-ago period.
Imports from China in the April-January period rose to $108.18 billion, up nearly 14% as against $95.05 billion a year ago.
In the services segment, India recorded a trade surplus of $24.3 billion in January 2026, as compared to $18.04 billion in the same month last year. This was driven by a jump in services exports to $43.9 billion from $34.75 billion. Services imports also rose, but the climb was smaller to $19.6 billion from $16.7 billion.
So far in this fiscal, India's merchandise exports have increased by 2.22% to $366.6 billion, Commerce Secretary Rajesh Agrawal said. Combined with the services segment, India may close the year with overall exports exceeding $860 billion, he added, according to news agency PTI.
The country's overall merchandise trade deficit, between April and January, has risen by 14.5% to $283.2 billion, as compared to $247.4 billion in the year-ago period. This is mainly driven by the rise in imports from $649.9 billion versus $606.1 billion in the year-ago period.
India's exports have stood ground in FY26 so far, despite being hit by US tariffs as high as 50%. With the interim trade deal with Washington set to come into effect, the country's exports are expected to climb. The Donald Trump administration has lifted the 25% tariffs imposed on India for Russian oil purchase, and has trimmed the so-called reciprocal levies to 18% from 25%.
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