India experiences a significant boost in exports during the initial phase of FY 2025-26, with a growth rate of 6.18%. This surge is primarily attributed to the sectors of electronics, pharmaceuticals, and gems.
In the opening months of the financial year 2025-26, India's export sector demonstrated resilience, with electronics, engineering goods, gems & jewellery, petroleum products, and pharmaceuticals driving the growth. According to the Ministry of Commerce & Industry, these key sectors are expected to continue as the mainstays of India's exports, with agricultural exports providing additional support.
The cumulative exports for merchandise and services during April to August 2025 amounted to US$ 349.35 billion, registering a 6.18% year-on-year growth. Merchandise exports reached US$ 184.13 billion, showing a 2.52% rise from the previous year, while services exports were estimated at US$ 165.22 billion, up from US$ 149.43 billion last year.
The trade deficit for April-August 2025 decreased from US$52.27 billion in 2024 to US$41.42 billion, indicating a narrowing of the trade deficit and a better external balance. This trend was further highlighted in August 2025, when imports dropped 7% to US$79.04 billion, significantly decreasing the monthly deficit. The trade deficit in August 2025 was US$ 9.88 billion, significantly lower than US$ 21.73 billion in August 2024.
Notably, India saw larger inflows from Russia, Saudi Arabia, Ireland, Iraq, and Qatar on the import front. However, exports expanded strongly in traditional and new destinations. UAE showed a +23.42% increase, USA a +7.15%, Netherlands a +17.87%, Hong Kong a +62.46%, and China a +22.38%. The sharp rise in shipments to Hong Kong from gems & jewellery and electronics indicates an emerging trade linkage of India with Asia.
The Minister responsible for Trade and Industry during the first five months of the fiscal year 2025-26 is Piyush Goyal. The diversification of India's export base was evident, with double-digit rise in cereals, coal & minerals, tea, dairy, poultry, ceramic items, and rice, in addition to the main categories mentioned. Non-petroleum exports showed stronger momentum, climbing to US$ 158.07 billion, a 7.35% increase.
The services imports during the same period were US$ 84.25 billion. Ireland became an important source for specialized and high-value imports. The surplus in services between April and August 2025 increased from US$ 68.25 billion to US$ 80.97 billion.
The sharp increase in exports and the narrowing of the trade deficit demonstrate India's ability to adapt to shifting global trade dynamics. The Ministry of Commerce & Industry emphasized that these developments underscore India's potential as a key player in the global trade arena.
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