New Delhi: India’s merchandise trade deficit widened sharply in January following a surge in imports, even as demand for Indian goods in the US remained resilient despite steep 50% tariffs imposed on most shipments.
The trade gap of $34.68 billion was the highest in the current fiscal year so far, though still below the record $41.68 billion recorded in October 2025.
Merchandise exports declined to $36.56 billion in January from $38.51 billion in December, though they were marginally higher than $36.43 billion in January 2025. Imports surged to $71.24 billion from $63.55 billion in December 2025 and $59.42 billion in January 2025.
The trade gap in December had stood at $25.04 billion and $23 billion in January 2025, according to provisional data released by the ministry of commerce and industry on Monday.
Exports to the US declined month-on-month in January, indicating some moderation despite overall resilience under higher tariffs, even as exporters faced pricing and margin pressures.
Earlier in February, the US decided to lower the reciprocal tariff on India to 18% after the two nations agreed to a trade pact. Earlier this month, President Donald Trump also removed the additional 25% levy on the condition that India stops buying Russian oil.
Meanwhile, bilateral trade between India and China also increased last month, with imports rising sharply alongside an improvement in exports, reflecting continued dependence on Chinese intermediate and electronic goods.
Analysts said that India’s export performance in January reflected the resilience and adaptability of exporters amid a challenging global environment.
India’s total merchandise exports during April–January 2026 (FY26) rose to $366.63 billion, up from $358.91 billion a year ago. Imports increased to $649.86 billion during the first 10 months of the current fiscal, leading to a goods trade deficit of $283.23 billion.
Exports to the US declined to $6.58 billion in January from $7.01 billion in December, though cumulative shipments during April–January rose to $72.46 billion. This compares with $68.46 billion in the same period of the previous fiscal year, reflecting steady growth despite tariff pressures.
Overall shipments in the first ten months (April–January) of the current fiscal year rose about 5.8% to $72.46 billion. Bilateral goods trade between India and the US stood at $116.39 billion during April–January, with India recording a trade surplus of $28.53 billion. This compares with bilateral trade of $112.51 billion in the corresponding period of the previous fiscal, when the trade surplus stood at $27.41 billion.
In contrast, trade with China remained heavily skewed against India. India’s goods shipments to China moderated to $1.58 billion in January from $2.05 billion in December and $2.20 billion in November. India’s bilateral merchandise trade with China reached $124.06 billion in the April-January period of the current fiscal, with a trade deficit of $92.30 billion. Exports to China climbed to $15.88 billion, up from $11.48 billion a year earlier.
The combined merchandise and services trade surplus narrowed on a year-on-year basis, even as services exports remained robust. Total exports (goods and services) rose to $80.45 billion in January from $74.01 billion in December 2025 and $74.97 billion in January 2025, while total imports jumped to $90.83 billion from $77.64 billion a year earlier. Services exports rose to $43.90 billion from $38.55 billion a year ago, while services imports increased to $19.60 billion from $18.22 billion a year ago.
Major drivers of merchandise export growth during January included electronic goods, meat, dairy and poultry products, drugs and pharmaceuticals, engineering goods and marine products.
Among the top destinations for India’s goods exports, the US ranks first, followed by the UAE, China, the Netherlands and the UK. On the import side, China remains India’s largest sourcing partner, followed by the UAE, Russia and the US.