India clocks record $89.99 billion exports in October, but merchandise trade deficit hits 1-year high

India's total exports, including merchandise and services, surged 29.9% year-on-year to a record $89.99 billion in October 2026, even as a sharp rise in merchandise imports pushed the goods trade deficit to a one-year high of $39.88 billion, according to government data released on Friday.

Commerce Secretary Rajesh Agrawal said the country had never recorded monthly exports of this magnitude, with both merchandise and overall exports registering significant growth during the month.

However, the record export performance was accompanied by a widening merchandise trade gap, as imports of goods rose faster than exports. The merchandise trade deficit stood at $39.88 billion in October, compared with $30.21 billion in September and $33 billion in October 2025. Economists had expected the deficit to be around $32.25 billion, according to a Reuters poll.


Also read: India’s October merchandise trade deficit widens to one-year high of $39.88 billion as imports surge

The broader trade picture was relatively more favourable. India's total exports, comprising goods and services, increased from $69.27 billion in October 2025 to $89.99 billion in October 2026. Total imports, meanwhile, rose to $110.07 billion from $94.42 billion a year earlier. Consequently, the overall trade deficit narrowed to $20.09 billion from $25.15 billion in October last year.

Merchandise exports hit record high

Merchandise exports rose to an all-time monthly high of $49.47 billion in October 2026, compared with $34.11 billion in the corresponding month last year, registering growth of 45.06%.

Agrawal said this was the highest-ever monthly merchandise export value recorded by India, alongside the highest monthly growth rate in the past five years.

On a month-on-month basis, merchandise exports increased 11.4% from $44.40 billion in September.

Services exports also contributed to the overall growth, rising to an estimated $40.51 billion in October from $35.17 billion in the year-ago period.

Agrawal said the overall export growth was broad-based and was not restricted to any particular sector or geographical market. According to him, 43 of India's top 50 export destinations recorded positive growth in October compared with the corresponding month last year.

He also highlighted that the country's total exports had registered the third-highest monthly growth rate in the past five years.

Imports surge, merchandise trade gap widens

Despite the strong export performance, rising imports remained a key pressure point.

Merchandise imports increased to $89.35 billion in October from $74.61 billion in September, marking a month-on-month jump of 19.7%. The increase was significantly higher than the 11.4% growth in merchandise exports during the same period.

The resulting merchandise trade deficit of $39.88 billion was the highest in a year, reflecting the pressure of higher import costs on India's external trade balance.

Energy imports remain an important factor in this equation. India, the world's third-largest oil consumer, imports nearly 85% of its crude oil requirements, leaving its import bill vulnerable to movements in international energy prices.

Disruptions in global energy markets linked to the conflict in West Asia have raised concerns over India's energy import costs. Higher crude prices, longer shipping routes, elevated freight charges and war-risk insurance premiums have added to the cost of imports.

These pressures could also affect domestic businesses dependent on imported energy and raw materials, potentially squeezing exporters' margins.

Brent crude futures have since declined to around $92 a barrel, offering some relief amid expectations that the West Asia conflict could de-escalate.

Trade agreements, export diversification in focus

The latest trade figures come as India looks to expand market access and diversify its export destinations through a series of trade agreements.

Commerce and Industry Minister Piyush Goyal said on November 13 that trade negotiations between India and the US were progressing, with only a few issues remaining unresolved.

India has also implemented trade agreements with the UK and New Zealand this year. The India-UK trade agreement came into force on July 15, while negotiations for the India-European Union free trade agreement have concluded. The EU agreement is expected to be implemented early next year.

The government is looking to use these agreements to improve access to overseas markets, diversify export destinations and deepen India's integration with global supply chains. The US remains India's largest export destination, while China is its biggest source of imports.

RBI flags external-sector risks

The Reserve Bank of India has also highlighted the opportunities and risks facing India's external sector.

In its October policy review, the central bank projected merchandise export growth of 11.6% and import growth of 11.7% for FY27, while estimating the current account deficit at 1.2% of GDP.

It noted that strong services exports, remittance inflows and the implementation of recent trade agreements could support India's external position.

However, elevated energy prices, uncertainty surrounding global trade policies and slower international trade remain key downside risks.

The RBI has also cautioned that a sustained increase in energy and transportation costs could put pressure on the current account, raise input costs for domestic businesses and create second-round inflationary pressures.

The October trade figures, therefore, present a mixed picture for India's external sector: record merchandise and services exports underline the strength of outbound shipments, but the widening goods trade deficit highlights the continuing challenge posed by rising import dependence and global cost pressures.