India’s Merchandise Exports Surge in September, Narrowing Trade Deficit and Boosting Shipments to the US
India’s merchandise exports surged by 23.04% year-on-year to reach $44.40 billion in September 2026, up from $36.08 billion in the same month last year, according to data from the Ministry of Commerce and Industry. The merchandise trade deficit narrowed to $30.21 billion from $33 billion in September 2025, despite an increase in imports to $74.61 billion from $69.08 billion. Overall exports, which include both merchandise and services, grew by 10.99% to an estimated $80.75 billion in September, compared to $72.76 billion a year earlier.
Electronics and Engineering Goods Drive Export Growth
Commerce Secretary Rajesh Agrawal attributed the rise in exports to strong merchandise shipments. He noted that September’s merchandise exports of $44.40 billion marked a significant increase from the previous year. Key contributors to this growth included higher shipments of electronic goods, petroleum products, engineering goods, chemicals, and agricultural products. Agrawal also highlighted that overall export growth accelerated in the second quarter of the current financial year, with a 15.84% increase from July to September, compared to 11.84% in the first quarter.
According to the ministry’s presentation, India’s total exports reached an estimated $242.6 billion in the second quarter, surpassing the $233.6 billion recorded in April-June. This figure represents the highest ever recorded for the second quarter.
Imports Rise as Merchandise Trade Gap Narrows
Merchandise imports rose to $74.61 billion in September from $70.67 billion in August, while exports increased from $43.81 billion to $44.40 billion during the same period. The merchandise trade deficit stood at $30.21 billion, slightly below economists’ expectations of $30.4 billion, but higher than the $26.86 billion deficit recorded in August. Global energy prices continue to impact India’s import bill, with Brent crude futures remaining above $100 a barrel amid ongoing geopolitical tensions.
India Looks to Expand Export Markets
India is actively seeking to diversify its export markets through various trade agreements. A trade deal with New Zealand is set to take effect next week, while the trade pact with Britain is already in force. Additionally, a broader agreement with the European Union is progressing towards implementation.
The United States remains India’s largest merchandise export destination in the first half of the current financial year, despite tariff-related disruptions. Merchandise exports to the US rose by 11.1% to $50.81 billion during April-September 2026, compared to $45.73 billion in the same period last year. Imports from the US also increased by 26% to $32.33 billion from $25.66 billion. India’s merchandise trade surplus with the US narrowed to $18.48 billion from $20.07 billion in the corresponding period last year.
Agrawal stated that negotiations for a proposed India-US trade agreement are progressing positively, with both sides aiming to conclude the deal soon. He emphasized that the agreement would depend on the finalization of the broader US tariff framework.
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