India’s April trade deficit widens to $28.4 billion even as exports jump to $43.6 billion – Firstpost

India’s merchandise trade deficit widened sharply to $28.38 billion in April, even as exports posted healthy growth at the start of FY27, highlighting the uneven dynamics of the country’s external trade amid rising imports and global geopolitical uncertainty.

According to provisional data released by the Commerce Ministry on Friday, merchandise exports rose to $43.56 billion in April 2026 from $38.28 billion a year ago. Imports, however, climbed faster to $71.94 billion, up from $65.38 billion during the same period, pushing the merchandise trade gap higher.

The April trade deficit widened from March levels, when India had recorded a narrower merchandise trade gap of $20.67 billion as lower imports and weaker exports reflected disruptions linked to the emerging impact of the US-Iran conflict.

However, the broader picture offered some relief. India’s overall trade deficit, which includes services trade, narrowed to $7.81 billion from $11.16 billion a year earlier. Total exports, including merchandise and services, rose to $80.80 billion, compared with $71.13 billion in April 2025.

Services continued to cushion India’s trade position. Services exports increased to $37.24 billion from $32.85 billion a year earlier, while services imports edged lower to $16.66 billion.

The data comes at a time when India has set an ambitious goal of more than doubling total exports to $2 trillion by FY31, targeting $1 trillion each from merchandise and services exports.

To achieve the target, the government is sharpening its focus on micro, small and medium enterprises (MSMEs), agricultural products, certification standards and the promotion of ‘Brand India’ in overseas markets. MSMEs account for nearly 48 per cent of India’s exports, making them central to export-led growth plans.

The external trade environment, however, remains challenging. The ongoing US-Iran conflict and disruptions around the Strait of Hormuz have affected shipping routes and raised freight costs across the Gulf region. Exporters, particularly smaller firms, are increasingly being forced to rely on longer and costlier trade routes, adding pressure on margins.

India’s annual merchandise trade deficit for FY26 stood at $333.2 billion, with imports rising to $774.98 billion and exports touching $441.78 billion. Including services, India recorded a record $860.1 billion in total exports during the fiscal year.

Reserve Bank of India Governor Sanjay Malhotra recently said new bilateral and regional trade agreements with key partners could help diversify India’s trade relationships, boost investment and integrate the country deeper into global value chains.