India’s trade deficit widened to $119.3 billion in FY 2025–26 from $94.6 billion in the previous financial year, marking the second-highest gap in the past 11 years, according to official data.The increase was driven by a rise in imports, which grew 6.4% year-on-year to $979.4 billion in FY26, compared with $919 billion in FY25—a jump of nearly $59 billion.Higher prices of gold contributed to the increase in gold imports, while silver imports rose due to both higher prices and increased volumes.
On the export side, overall exports recorded a 4.22% growth during the financial year. Merchandise exports rose 1% to $441.78 billion in FY26.
Key sectors that registered export growth included electronic goods, engineering goods, meat, dairy and poultry products, marine products, as well as mica and minerals. Among major markets, exports to China increased by $5 billion, while shipments to Spain rose by $2 billion. Exports to the US and UAE also recorded growth during the year, even as the trade surplus with the US narrowed.For March 2026, merchandise exports stood at $38.92 billion, down from $42.05 billion in March 2025.Trade flows were impacted by geopolitical factors, particularly in West Asia. Exports to the region in March 2026 fell 57.95%, a decline of $3.5 billion compared to the year-ago period. Imports from West Asia also dropped 51.6% during the month.Commerce Secretary said the current challenges, including geopolitical disruptions, are expected to ease over time.On trade agreements, India’s free trade agreement with the UK is expected to come into effect in May 2026. The India-Oman agreement is likely to be implemented by June 1, subject to approvals, while the India-New Zealand FTA is expected to be signed on April 27. India is also working towards concluding a trade deal with the European Union in calendar year 2026, with a target to operationalise it in FY27.Separately, remittance inflows remained on an upward trajectory, with officials indicating that the trend is expected to continue if sustained in the final quarter.First Published: Apr 15, 2026 2:53 PM IST
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