Winning Bizness Desk

Mumbai. India’s global trade story continues to expand at a rapid pace, with total trade volumes approaching a massive $1.85 trillion this financial year. However, a faster rise in imports compared to exports is widening the country’s trade deficit, raising concerns among economists. Despite this imbalance, strong services exports and robust remittances from overseas Indians are helping maintain overall financial stability.

Exports continue steady upward growth trend

India’s exports have shown steady growth between April 2025 and February 2026, reaching $790.9 billion, marking a 5.8 percent increase over the same period last year. According to economic think tank GTRI and its founder Ajay Srivastava, the momentum is expected to continue, pushing total exports to around $862.8 billion by the end of the financial year.

The growth reflects sustained global demand for Indian goods and services, although the pace remains moderate compared to imports.

Services sector drives export expansion strongly

The biggest contributor to export growth has been the services sector, which continues to outperform goods exports. India is increasingly positioning itself as a global hub for technology and knowledge-based services.

Key drivers include:

• Software and IT-enabled services exports rising steadily
• Strong demand for business consulting and outsourcing services
• Growth in technology support services across global markets
• Increasing reliance of global firms on Indian digital expertise

This surge has helped cushion the impact of slower growth in merchandise exports.

Imports surge on energy and electronics demand

India’s imports rose to $900.5 billion during the same April-February period, registering a sharper 7.4 percent increase year-on-year. The rise is largely driven by domestic demand for critical sectors that fuel economic growth.

Major import pressures include:

• Higher demand for crude oil and energy resources
• Increased imports of electronics and semiconductor components
• Industrial inputs required for manufacturing expansion
• Rising dependence on foreign supply chains

This faster growth in imports has outpaced export gains, leading to a widening gap.

Trade deficit widens amid China reliance concerns

The trade deficit is now projected to reach around $119.6 billion for the full financial year. A major concern remains India’s growing trade imbalance with China, where imports significantly exceed exports.

India continues to depend on China for:

• Electronics components and mobile parts
• Batteries used in electric vehicles
• Solar panels and renewable energy equipment
• Specialty chemicals for industrial use

Efforts to reduce this dependence have seen limited success so far, highlighting structural challenges in domestic manufacturing.

Remittances and key imports shape outlook

Despite the widening deficit, inflows of money from Indians working abroad are providing a crucial buffer. Remittances are expected to touch nearly $135 billion this year, helping stabilise the current account.

Other notable trade trends include:

• Surge in fertilizer imports due to high global prices
• Rising gold and silver imports driven by industrial demand
• Slight decline in crude oil imports amid softer prices

With exports contributing about 20 to 21 percent of GDP and total trade accounting for nearly 43 to 44 percent, global trade remains central to India’s economic growth, even as imbalances persist.