India’s Trade Deficit Widens Sharply Amid Rising Imports

2026-02-16 11:37 By Joana Ferreira 1 min. read

India’s merchandise trade deficit surged to $34.68 billion in January 2026, up from $23.43 billion a year earlier and well above market expectations of $26 billion.

The gap was the largest since October’s record $41.68 billion, coming just weeks before New Delhi struck an interim trade deal with the US aimed at lowering tariffs.

Imports jumped 19.2% year-on-year to $71.24 billion, driven largely by higher purchases of gold and silver, while exports rose only 0.6% to $36.56 billion.

Earlier this month, US President Donald Trump announced a reduction in tariffs on Indian goods to 18% from 50%, offering relief to exporters and policymakers.

Under the agreement, India has committed to reducing Russian oil imports and plans to more than double its annual purchases of US goods.

The deal followed a trade pact with the EU, reflecting India’s broader push to strengthen trade ties with major global partners.



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India’s Trade Deficit Widens Sharply Amid Rising Imports
India’s merchandise trade deficit surged to $34.68 billion in January 2026, up from $23.43 billion a year earlier and well above market expectations of $26 billion. The gap was the largest since October’s record $41.68 billion, coming just weeks before New Delhi struck an interim trade deal with the US aimed at lowering tariffs. Imports jumped 19.2% year-on-year to $71.24 billion, driven largely by higher purchases of gold and silver, while exports rose only 0.6% to $36.56 billion. Earlier this month, US President Donald Trump announced a reduction in tariffs on Indian goods to 18% from 50%, offering relief to exporters and policymakers. Under the agreement, India has committed to reducing Russian oil imports and plans to more than double its annual purchases of US goods. The deal followed a trade pact with the EU, reflecting India’s broader push to strengthen trade ties with major global partners.
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