Trade Balance

India's trade performance reflects a complex interplay of robust export growth and widening trade deficits. Driven by utilization of free trade agreements (FTAs), the nation's combined merchandise and services exports reached a record $863.1 billion in FY 2025-26, with a strong 13.16% increase in April-July 2026-27, particularly fueled by petroleum products and electronic goods. However, the current account swung to a $6.2 billion deficit in June 2026, as imports rose faster than exports, resulting in a wider overall trade deficit of $49.43 billion for April-July. While capital inflows provided a buffer, the data suggest increased vulnerability to external shocks and highlight the need for continued efforts to diversify export markets and manage import dependencies.