Key Details
July merchandise exports grew faster than imports in percentage terms. The trade deficit nevertheless widened because imports began from a much larger base.
Trade in July
Indicator | July 2025 | July 2026 | Change |
|---|---|---|---|
Merchandise exports | US$36.98 bn | US$44.24 bn | +19.63% |
Merchandise imports | US$64.86 bn | US$76.22 bn | +17.51% |
Merchandise trade deficit | US$27.88 bn | US$31.98 bn | Widened by US$4.10 bn |
Total exports* | US$70.72 bn | US$80.14 bn | +13.31% |
Total imports* | US$82.16 bn | US$95.16 bn | +15.83% |
Overall trade deficit* | US$11.43 bn | US$15.03 bn | Widened by US$3.60 bn |
Cumulative Trade
Indicator | Apr–Jul 2025–26 | Apr–Jul 2026–27 | Change |
|---|---|---|---|
Merchandise exports | US$148.48 bn | US$173.78 bn | +17.04% |
Merchandise imports | US$245.14 bn | US$292.38 bn | +19.27% |
Merchandise trade deficit | US$96.66 bn | US$118.60 bn | Widened by US$21.94 bn |
Total exports* | US$279.63 bn | US$316.42 bn | +13.16% |
Total imports* | US$311.94 bn | US$365.85 bn | +17.28% |
Overall trade deficit* | US$32.32 bn | US$49.43 bn | Widened by US$17.11 bn |
*Total trade combines merchandise and services. July services figures are estimates because the latest RBI data available at the time of release were for June 2026. Earlier cumulative services figures were revised using quarterly balance-of-payments data.
Export Growth Was Not Confined to Petroleum
Petroleum products recorded the fastest growth among the major categories identified in the government release, but electronics and engineering goods also made substantial contributions.
Petroleum products: Up 67.64% to US$6.92 billion
Electronic goods: Up 57.40% to US$5.92 billion
Engineering goods: Up 17.71% to US$12.24 billion
Organic and inorganic chemicals: Up 14.39% to US$2.80 billion
Cotton yarn, fabrics, made-ups and handloom products: Up 8.40% to US$1.11 billion
Non-petroleum exports rose 13.57% in July and 12.79% during April–July. Exports excluding both petroleum and gems and jewellery increased 14.87% in July, indicating that the expansion was broader than the headline petroleum surge.
FIEO views the performance of engineering goods, electronics, pharmaceuticals, chemicals and textiles as evidence of growing manufacturing and value-added participation in the export basket.
Import Growth Remains the Main Counterweight
Although merchandise exports grew faster than imports during July, imports were US$31.98 billion larger than exports. Over April–July, imports grew faster than exports, expanding the merchandise deficit by 22.70%.
The overall deficit, after including estimated services trade, widened from US$32.32 billion to US$49.43 billion. Services therefore continued to offset part of the goods deficit, but could not prevent the external trade gap from increasing.
FIEO notes that imports of energy, capital goods and intermediate products can accompany higher investment and production. It also calls for stronger domestic capacity in electronics, machinery and critical inputs where import dependence remains high.
Sustaining the Momentum Will Require More Than Export Growth
FIEO identifies high freight costs, shipping disruptions, geopolitical uncertainty and restricted access to affordable working capital as continuing risks. It recommends:
Competitive export credit and easier working-capital access
Faster trade facilitation
Greater support for MSMEs and labour-intensive industries
Stronger domestic production of critical inputs
Wider product and destination diversification
These measures would determine whether record monthly export values develop into a durable improvement in India’s external trade position.
Policy Relevance
Broad-based exports strengthen resilience: Growth outside petroleum reduces dependence on movements in a single commodity category.
Export growth must be assessed alongside imports: A strong export headline can coexist with a widening trade deficit when imports are substantially larger.
Import composition matters: Imports that expand productive capacity have different implications from persistent reliance on imported finished goods.
Domestic supply chains affect both sides of the trade balance: Localising critical inputs can support export competitiveness while moderating structural import dependence.
MSME participation shapes the employment impact: Credit, logistics and compliance costs influence whether export gains extend to smaller firms and labour-intensive sectors.
Follow the Full Updates Here: Department of Commerce Trade Data for July 2026 | FIEO’s Assessment of July 2026 Trade Performance