India’s trade deficit widens 31.5% to $15.03 billion

India's overall trade deficit widened by 31.5 per cent year-on-year to $15.03 billion in July 2026 as imports grew faster than exports, even as merchandise shipments touched their highest-ever level for the month, government data showed on Thursday. Overall exports, comprising merchandise and services, increased by about 13.3 per cent to $80.14 billion in July from $70.72 billion in the corresponding month last year. Imports rose at a faster 15.8 per cent to $95.16 billion from $82.16 billion, widening the combined trade gap from $11.43 billion a year earlier.

Merchandise exports hit record

Merchandise exports recorded a strong performance during the month, rising 19.63 per cent year-on-year to $44.24 billion from $36.98 billion.

The Commerce Ministry said the $44.24-billion figure was the highest merchandise export value ever recorded for the month of July.

Goods imports also climbed sharply, increasing 17.52 per cent to $76.22 billion. This pushed the merchandise trade deficit to $31.98 billion, compared with $27.88 billion in July last year.

The merchandise deficit was also higher than the $30.43 billion recorded in June, reaching its highest level in six months.

Electronics, petroleum lead growth

Several major export categories registered strong growth in July.

Petroleum product exports surged 67.64 per cent year-on-year to $6.92 billion, while electronic goods shipments jumped 57.4 per cent to $5.92 billion. Engineering goods were another important contributor to the month's export performance.

The rise in electronics exports underlined the sector's growing contribution to India's overseas shipments, while the strong overall merchandise figure provided a positive signal despite pressures from a widening import bill.

India's exports to the Middle East also increased during the month, even as geopolitical tensions in the region disrupted shipping and pushed up freight costs.

Imports rise faster

The stronger export performance was outweighed by the increase in imports.

India's merchandise imports reached $76.22 billion during July, compared with $70.84 billion in June. Electronics imports registered a particularly sharp year-on-year increase, while the country's gold import bill also rose.

Higher crude oil prices and elevated freight rates amid tensions in the Middle East added to import pressures. India's oil import bill stood at $18.31 billion during July.

The figures showed that while external demand for Indian goods remained resilient, stronger domestic demand for imported commodities and products continued to exert pressure on the country's trade balance.

Services provide cushion

India's services sector continued to provide a significant offset to the large merchandise trade deficit.

Services exports were estimated at $35.89 billion during July, helping restrict the overall goods-and-services trade deficit to $15.03 billion despite the merchandise deficit approaching $32 billion.

The performance reflects the continuing importance of services exports in balancing India's external trade account.

April-July deficit jumps

For the April-July period of the current financial year, India's overall trade deficit widened sharply.

The cumulative goods-and-services trade gap increased 52.97 per cent to $49.43 billion during the first four months of 2026-27.

Merchandise exports during April-July rose 17.04 per cent to $173.78 billion, while the country's import bill also expanded strongly during the period.

The July numbers therefore presented a mixed picture for India's external sector: exports remained robust and merchandise shipments reached a record for the month, but faster growth in imports widened both the merchandise and overall trade deficits.