India’s trade deficit widened sharply in January 2026 as imports surged 19% year-on-year to $71.24 billion, while exports grew only marginally by 0.6% to $36.56 billion. The trade deficit, the gap between what India buys from abroad and what it sells – rose to $34.68 billion, the highest in the last three months. The main reason for the increase in imports was a massive rise in precious metals, particularly gold and silver. Gold imports jumped more than 4.5 times, while silver imports more than doubled compared with January 2025. Even though other goods contributed to imports, the sharp rise in the value of precious metals played the largest role in pushing up overall import numbers.
On the export side, merchandise shipments remained subdued. Exports to key markets, such as the United States, fell due to higher tariffs on Indian goods, while some sectors like engineering goods, electronics, pharmaceuticals, chemicals, and marine products recorded modest growth. Despite this, the overall growth in exports was insufficient to offset the rising imports, which widened the trade gap. However, India’s services sector performed much better. Services exports, including IT, consulting, and tourism, rose by 26.3% to about $43.9 billion, while services imports increased by 17.3%, leaving a services trade surplus of roughly $24.3 billion. This surplus helped cushion the impact of the merchandise trade deficit to some extent.
Commerce Secretary Rajesh Agrawal noted that while the one-month trade deficit was higher, India’s exports are on track to reach around $860 billion in goods and services for the fiscal year. He emphasized that the rise in imports was largely temporary and driven by gold and silver, and that longer-term export momentum remains positive. Analysts also point out that a high trade deficit can influence currency stability, foreign exchange reserves, and economic policy decisions, making it an important figure for policymakers and investors.
In summary, India’s trade in January 2026 was shaped by a sharp increase in imports, particularly precious metals, alongside only modest growth in merchandise exports. Strong performance in the services sector provided some relief, but the overall trade deficit widened significantly. Monitoring these trends over the coming months will be key to understanding the country’s trade and economic health.