India’s exports rise in first nine months of FY26, trade deficit widens beyond $25 billion

India’s exports have continued on an upward trajectory in the first nine months of FY26, despite a widening trade deficit. Cumulative merchandise and services exports from April to December 2025 were estimated at $634.26 billion, up 4.33% from $607.93 billion in the same period last year. The trade deficit for the period has risen to over $25 billion.

The Commerce Ministry noted that the growth pattern suggests merchandise exports could surpass $450 billion and services exports $400 billion by the end of the fiscal, though it did not project a timeline for services overtaking goods exports.

Top export destinations showing the highest growth in value during April–December 2025 included the US (9.75%), China (36.68%), UAE (7.49%), Spain (53.33%) and Hong Kong (25.75%).

Key import sources witnessing higher inflows over the same period were China (13.46%), the US (12.85%), Hong Kong (29.28%), UAE (8.26%) and Ireland (103.06%).

Smartphones emerged as India’s fastest-growing export segment, rising 44% year-on-year in the first three quarters. The US led as the largest export destination in this category with a 200% YoY increase from April to November 2025, followed by the UAE (62%), China (565%), Portugal (10%), Spain (8%), and emerging markets including Slovakia, Israel, Latvia, Vietnam, and South Korea.

The Ministry emphasised that both merchandise and services exports remain critical to India’s external trade strategy, signalling continued expansion into new markets while strengthening traditional trade partners.