Summary:
India’s merchandise exports rose 23.04% year-on-year to $44.40 billion in September 2026, driven by engineering goods, electronics and petroleum products. Imports reached $74.61 billion, widening the monthly trade deficit versus August, while first-half FY27 exports grew 18.51%.
India’s merchandise exports surged 23.04% year-on-year to $44.40 billion in September 2026, helped by higher shipments of engineering goods, electronics, petroleum products and chemicals. However, the country’s merchandise trade deficit widened to $30.21 bn as imports jumped to $74.61 bn, data released by the Ministry of Commerce and Industry on October 15 showed.
Exports of Merchandise Expand, Trade Deficit Narrows YoY
India’s goods exports in September 2025 stood at $36.08 bn and in September 2026 at $44.40 bn, up $8.32 bn. Imports rose at a slower rate of 8% YoY vis-à-vis a 23.04% rise in exports.
The merchandise trade deficit narrowed to $30.21 bn from $33 bn in September 2025. But the deficit was higher compared to August 2026 at $26.86 bn, due to higher monthly import requirements.
| Trade Indicators | September 2026 | YoY Variation |
| Merchandise Exports | $44.40 bn | +23.04% |
| Merchandise Imports | $74.61 bn | +8.00% |
| Merchandise Trade Deficit | $30.21 bn | Contraction |
| Total Exports (Including Services) | $80.75 bn | +10.99% |
Export Surge Driven by Engineering, Electronics and Petroleum
Engineering goods continued to be a key driver as exports grew 20.91% YoY to $12.17 bn from $10.06 bn. Demand for machinery, industrial equipment and manufactured products boosted export performance.
Electronics went up even further. Export value rose by $2.20 bn to $5.31 bn from $3.11 bn a year ago, a jump of 70.44%.
Exports of petroleum products increased by 31.90% to $6.22 bn and exports of organic and inorganic chemicals rose by 24.21% to $2.94 bn.
Other categories also showed gains. Exports of gems and jewellery rose 18.95%, pharmaceuticals 4.68% and cotton yarn, fabrics & made-ups 20.76%. The figures show that the expansion in September was spread across a number of export categories rather than being concentrated in one industry.
Exports in the First Half Cross $259 bn in FY27
India’s merchandise exports during April-September FY27 stood at $259.89 bn with a growth of 18.51% YoY as against $219.30 bn during the same period last year (FY26).
Merchandise imports climbed 16.31% to $437.53 billion, lifting the first half trade gap to $177.64 billion from $156.88 billion a year ago.
Exports, excluding petroleum products, rose 15.56% to $218.70 billion. Meanwhile, the total exports of goods and services are estimated at $476.20 billion, up 13.84% year-on-year. The services trade surplus partially offset the merchandise deficit.
FY27 merchandise exports could surpass $500 bn at current rates. But $550 bn would have to be shipped around $290.11 bn in the second half or on average $48.35 bn a month.
Trade Outlook: Opportunities and Challenges
India’s export performance is taking place against a backdrop of changing global trade conditions, high crude oil prices and geopolitical disruptions affecting shipping routes.
Manufacturing activity, employment and foreign exchange earnings can be supported by higher exports. But during times of higher import prices an ongoing merchandise trade deficit can raise the demand for external financing and put pressure on the rupee.
September data point to strong export performance but the larger monthly trade deficit and rising import bill for the first-half of the year remain key concerns. India’s export performance for the rest of FY27 will be influenced by global demand trends, crude prices and trade pacts.
