India’s external trade posted a strong performance in August 2026, with total exports (merchandise and services combined) rising 25.41% year-on-year to $82.68 billion. Imports grew at a slower pace, helping narrow the overall trade deficit to $9.41 billion from $11.62 billion a year ago, according to provisional data from the Ministry of Commerce and Industry.
Merchandise exports hit decade-high growth
Merchandise (goods) exports were the main driver, climbing 26.12% to $43.81 billion in August—the fastest August growth rate in a decade. Key categories that powered the surge included electronic goods, petroleum products, and engineering goods.
- Electronic goods: Exports jumped 89.82% to $5.55 billion, reflecting stronger global demand and India’s expanding role in electronics manufacturing.
- Petroleum products: Shipments rose 63.27% to $6.81 billion, supported by robust refining margins and steady overseas demand.
- Engineering goods: Exports increased 24.86% to $12.32 billion, underlining the competitiveness of India’s industrial base.
Other categories that recorded solid gains included organic and inorganic chemicals (+16.38%), cotton yarn and fabrics (+13.79%), marine products (+27.76%), and pharmaceuticals (+3.84%). Iron ore exports more than doubled, rising 126.3%.
Services exports also rise sharply
Services exports, estimated at $38.87 billion for August, grew 24.61% compared with $31.19 billion in the same month last year. This broad-based strength in both goods and services helped push total exports to $82.68 billion, up from $65.93 billion in August 2025.
Trade deficit narrows despite high oil prices
Total imports (merchandise and services) stood at $92.09 billion in August, up 18.75% from $77.55 billion a year earlier. Merchandise imports rose 14.1% to $70.67 billion, while services imports increased to $21.42 billion from $15.59 billion.
Despite higher crude prices—India’s oil basket averaged $90.19 a barrel in August, up from $82.04 in July—the overall trade deficit narrowed. A sharp fall in gold imports played a key role: gold shipments dropped to $2.3 billion in August from $4.16 billion in July, after Prime Minister Narendra Modi urged people to curb non-essential gold buying.
Strong performance across key markets
Export growth was broad-based across major destinations. In August 2026, shipments to the United States rose 21.83%, while exports to Singapore, Spain, China, and Tanzania surged by 160.96%, 196.47%, 52.35%, and 214.52%, respectively. This points to successful market diversification beyond traditional buyers.
Over the April–August 2026–27 period, cumulative exports (merchandise and services) reached $399.27 billion, up 15.55% from a year ago. Cumulative imports stood at $459.65 billion, up 18.01%, leaving a trade deficit of $60.38 billion for the first five months of the fiscal year.
What the numbers mean
The 26% jump in merchandise exports signals resilient external demand and improving competitiveness in sectors such as electronics, engineering, and refined fuels. A narrower overall deficit in August, despite elevated oil prices, is a positive sign for India’s external balance.
However, the wider cumulative deficit for April–August underlines the challenge if crude prices remain high and gold demand picks up again. Sustaining export momentum will depend on continued policy support for manufacturing, stable trade relations, and global growth conditions.
