India's trade deficit widens to $30.21 billion in September despite 23% jump in exports

Listen to this article in summarized format

India's trade deficit widens to $30.21 billion in September despite 23% jump in exports

The deficit was broadly in line with economists' expectations of $30.4 billion, according to a Reuters poll.

Merchandise imports rose to $74.61 billion in September from $70.67 billion in the previous month, while exports increased marginally to $44.40 billion from $43.81 billion.

The widening trade gap comes as the conflict involving the United States and Iran continues to disrupt global energy supplies, raising inflation concerns for India, the world's third-largest oil importer.

Brent crude futures have remained above $100 per barrel amid the conflict, while attacks around the Strait of Hormuz have intensified over the past 10 days. Iran has said it is escalating strikes in response to the US blockade of its ports and tougher sanctions imposed last month.

Against this backdrop, the Reserve Bank of India raised interest rates earlier this month to contain inflationary pressures and subsequently announced measures to support the rupee.

Despite the widening deficit, export growth remained broad-based across several sectors.

Trade Secretary Rajesh Agrawal said the increase reflected "India's strength across sectors including petroleum products, meat, dairy, poultry, electronic goods, handicrafts, and engineering goods."

India is also seeking to diversify its export destinations, with its trade agreement with New Zealand scheduled to take effect next week, its pact with Britain already operational and a broader agreement with the European Union moving towards implementation.

Automobile exports provided some support, rising 22.5% year-on-year to 684,481 vehicles in September 2026, according to separate data released by the Society of Indian Automobile Manufacturers (SIAM).

Two-wheeler exports led the increase, jumping 26.8% to 544,797 units, although passenger vehicle shipments declined 2.2%.

Meanwhile, services exports were estimated at $36.35 billion in September, compared with imports of $19.44 billion, according to trade ministry figures.

Gold imports declined to $1.8 billion from $2.3 billion in August, when purchases had increased due to inventory restocking ahead of the festive season.

During the first six months of FY27, gold imports fell 27.32% year-on-year to $19.27 billion.

The United States remained India's largest export destination, with merchandise shipments rising to $50.81 billion during April-September from $45.82 billion in the corresponding period last year.