India’s merchandise exports recorded strong growth in August 2026, rising 26.1% year over year to $43.8 billion, according to data cited by IBEF. The pace of expansion was higher than the 19.6% growth recorded in July, signaling stronger momentum in the country’s external trade.
At the same time, slower growth in imports helped reduce India’s merchandise trade deficit. The gap narrowed to $26.9 billion in August from $32 billion in July and approximately $27.2 billion during the same month a year earlier.
Exports excluding oil, gems and jewelry also performed strongly. Core exports increased 22.7% in August, compared with 14.9% growth in July. Shipments of gems and jewelry returned to positive growth, rising 0.7%, while oil exports surged 63.3%.
The United States remained an important destination for Indian goods, with exports to the US increasing 21.8% from a year earlier. India also recorded stronger shipments to Malaysia, Singapore and Japan.
However, exports to some West Asian markets declined. Shipments to the United Arab Emirates fell 26.1%, while exports to Saudi Arabia decreased 17.5%. The declines came amid disruptions affecting trade activity in the region.
Agricultural exports also contributed to the overall performance. Higher shipments of rice and marine products supported the sector, while exports of meat, dairy and poultry products continued to register double-digit growth.
India’s imports rose 14.1% year over year to $70.7 billion in August, slowing from 17.5% growth in July. The moderation was partly linked to a sharp decline in gems and jewelry imports, which fell 34.8%. Gold imports alone dropped 57.7%.
Core imports increased 18.9%, while oil imports continued to expand, recording 25.8% growth during the month.
Services trade provided additional support to India’s external account. The preliminary services surplus stood at approximately $17.5 billion in August, slightly below the $17.6 billion recorded in July but higher than the $15.6 billion surplus reported a year earlier.
Looking ahead, Crisil Intelligence expects crude oil prices to average between $88 and $93 per barrel during fiscal year 2027. It also projects India’s current account deficit to widen to 1.5% of GDP in FY27, compared with 0.6% in FY26.
The August figures underline the continued strength of India’s export performance, while the moderation in imports helped ease pressure from the merchandise trade gap.
