India’s Trade Deficit Narrows To $27.1 Billion In February As Imports Ease, Services Exports Remain Strong

India’s merchandise trade deficit narrowed in February as import volumes declined from the previous month, although strong demand for energy, gold and electronic goods continued to place pressure on the country’s trade balance.

According to provisional data released by the Ministry of Commerce and Industry, the gap between exports and imports stood at $27.1 billion in February, lower than the $34.68 billion deficit recorded in January.

However, the deficit remained wider than the $14.42 billion recorded in February last year.

Merchandise exports during the month were estimated at $36.61 billion, marginally lower than the $36.91 billion registered in February 2025.

Imports, meanwhile, reached $63.71 billion, significantly higher than $51.33 billion a year earlier, reflecting continued demand for fuel, precious metals and electronics.

On a month-on-month basis, exports saw only a slight increase of about 0.14 per cent compared with $36.56 billion in January 2026, while imports dropped from $71.24 billion in the previous month, when higher commodity purchases had driven the import bill upward.

Global geopolitical tensions, particularly in West Asia, have also begun to influence trade flows.

Disruptions along key shipping routes through the Red Sea have led to rising freight charges, insurance costs and longer transit times, creating logistical challenges for exporters shipping goods to Europe, Africa and the Americas.

Industry representatives have cautioned that sectors such as petroleum products, chemicals, engineering goods and agricultural commodities may face additional pressure if maritime disruptions continue.

Despite volatility in merchandise trade, India’s services sector provided a stabilising cushion. Services exports rose to $39.53 billion in February, compared with $31.65 billion in the same month last year, while services imports increased to $16.38 billion.

When goods and services are combined, total exports stood at $76.13 billion, while total imports reached $80.09 billion, resulting in an overall trade deficit of $3.96 billion for the month.

For the April 2025–February 2026 period, India’s total exports reached $790.86 billion, reflecting steady growth in services exports even as rising imports continued to widen the overall trade gap.

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