India's trade gap widens in 'tariff tantrum' month; exports surge 9%

Data released by the commerce department showed in the first month of FY26, exports grew 9 per cent to $38.5 billion while imports shot up by 19.1 per cent to $64.91 billion

India’s merchandise trade deficit widened significantly to $26.42 billion in April from $21.5 billion in March, as a 9 per cent year-on-year uptick in exports was outweighed by a far sharper surge in imports that hit their third-highest tally in a month that US President Donald Trump’s tariff tantrums upended global trade dynamics.

  While April’s exports stood at $38.5 billion, a tad lower than the $41.97 billion recorded in March, imports rose to $64.91 billion, 19.1 per cent higher than a year ago and 2.2 per cent over March’s influx, according to quick trade estimates released by the Commerce Ministry on Thursday. The goods trade deficit stood at $19.2 billion in April 2024.  

  April’s exports were driven by a 27 per cent rise in shipments to the US valued at $8.42 billion as exporters frontloaded shipments to take advantage of differential tariffs vis-à-vis China. The US administration had imposed a 145 per cent tariff on China while Indian exporters had to bear a 10 per cent baseline tariff, after the Trump regime paused higher tariff plans on several countries’ products for 90 days.  

  However, imports from China shot up 27 per cent to $9.91 billion in April, contributing significantly to the spike in the import bill.

 

Commerce secretary Sunil Barthwal said April’s export performance provides optimism that India will maintain the momentum in FY26. “Exports seem to be resilient. This should be a good year for us. External factors are not entirely in our hands,” he remarked.

 

Aditi Nayar, chief economist at ICRA, said April’s goods trade deficit exceeded expectations despite a healthy growth in exports, partly on account of a front-loading of crude oil imports amid softer prices, as well as a sharp increase in electronic goods’ inflows. “With this, the absolute size of the current account deficit for Q1 FY26 appears set to widen to $14-16 billion,” she concluded.

  Imports of petroleum products jumped 25.6 per cent in April to $20.71 billion, almost a third of the overall import bill. Exports of petroleum products grew at a much milder pace of 4.7 per cent to $7.3 billion.

 

Electronics goods imports grew 31.2 per cent to $9.2 billion, while gold imports saw a more subdued uptick of 4.9 per cent to touch $3.1 billion. Electronics goods exports jumped 39.5 per cent to nearly $3.7 billion, while gems and jewellery shipments’ value rose 10.7 per cent to cross $2.5 billion.

 

Some other sectors witnessing high import growth included chemicals (10.85 per cent), plastics (14.1 per cent), chemical material and products (115.8 per cent), iron and steel (12.5 per cent), and machinery (23.2 per cent). However, imports of vegetable oils fell 8.1 per cent, along with coal (-12.3 per cent) and transport equipment (-3.2 per cent).

 

Readymade garments’ exports rose 14.4 per cent to hit $1.37 billion. Engineering goods rose 11.3 per cent to $9.5 billion – about a quarter of India’s total exports in April. Exports of rice were up 13.6 per cent to cross a billion dollars, while pharmaceuticals’ shipments grew a mere 2.4 per cent to a tad under $2.5 billion. Organic and inorganic chemicals exports contracted 9.1 per cent to $2.26 billion in April.  

 

S C Ralhan, President, Federation of Indian Export Organisations (FIEO) said India’s trade performance in April signals a promising start to the fiscal year, reflecting the resilience, adaptability, and global competitiveness of Indian exporters. “The growth underscores the robust fundamentals of Indian exports despite global headwinds, including geopolitical tensions, inflationary trends, and supply chain disruptions. Exporters have responded with agility and innovation, supported by rising demand across key sectors,” he averred.