Month-on-month gain builds on a strong Q1 as exporters navigate US tariffs and Gulf-driven shipping disruption
India’s merchandise exports rose to $44.20 billion in July 2026, up from $40.40 billion in June, continuing a recovery in outbound trade even as exporters contend with a challenging global backdrop shaped by US tariff policy and shipping disruption tied to the Gulf conflict. The July figure builds on a first-quarter performance in which exports for the April-June period rose 15.92 per cent year-on-year to $129.32 billion, according to commerce ministry data compiled by trade trackers.
Imports have grown at a faster clip over the same stretch, widening India’s trade deficit. For the April-June quarter, imports climbed 19.89 per cent to $216.18 billion, while June alone saw imports rise about 31 per cent year-on-year to $70.84 billion, pushing the monthly trade deficit to $30.43 billion — one of the wider monthly gaps recorded in recent years. The acceleration in imports has been driven partly by elevated energy costs, as India — like other major LNG and crude importers — has had to pay more and diversify sourcing amid the Gulf-related supply disruptions affecting global energy markets.
Looking at the full previous fiscal year for context, India’s exports reached $860.05 billion in FY 2025-26, with services exports growing 7.94 per cent and providing a steadying counterweight to more subdued merchandise growth. Imports for the same fiscal year rose to $980.4 billion, a sharper increase that reflects both higher energy import costs and strong domestic demand for capital goods, electronics and industrial inputs as India’s economy continues to expand.
Trade analysts note that India’s export performance in the current environment reflects a mixed picture: exporters have shown resilience in adapting to the tariff regime negotiated with the United States earlier in the year, and to shifting global shipping routes and costs stemming from the Red Sea and Hormuz disruptions, but the pace of merchandise export growth remains more moderate than the government’s own long-term targets envision. Sectors including engineering goods, pharmaceuticals, and textiles have continued to perform relatively well, while labour-intensive segments more exposed to tariff-sensitive product categories have faced a bumpier path.
The trade data carries direct implications for India’s ports and logistics sector. Rising export volumes are feeding into the throughput gains reported at major gateways including JNPA and the newly EXIM-enabled Vizhinjam, while the parallel surge in imports — particularly energy cargo — is adding pressure on both liquid bulk terminals and container capacity simultaneously. Freight forwarders say the net effect has been a busier, but also more complex, planning environment, as exporters and importers alike navigate elevated freight costs on routes affected by the Suez and Hormuz disruptions alongside currency pressure from the widening trade deficit.
With Qatari LNG supply constrained and Gulf shipping routes still in flux, economists caution that India’s import bill is unlikely to ease significantly in the near term, making continued momentum in merchandise and services exports — rather than any near-term narrowing of the deficit — the more realistic marker of trade health to watch through the rest of the year.
Government officials have pointed to diversification of export markets, including deeper trade engagement with the European Union, ASEAN and Gulf partners, as a medium-term strategy to reduce dependence on any single destination market such as the United States. Whether that diversification gathers pace through the remainder of the fiscal year will likely shape how resilient India’s export numbers prove to be if global shipping and tariff conditions take another turn.
