India's trade deficit narrows to $26.86 bn in August as gold imports plunge

India’s merchandise trade deficit narrowed marginally to $26.86 billion in August from $27.2 billion a year earlier, as imports, particularly of gold, fell sharply to make up for a slip in exports from the previous month.

India’s merchandise exports rose 26.1% year-on-year to $43.81 billion in August, highest for the month in at least a decade, while imports grew 14.1% to $70.76 billion.

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India's gold imports dipped to $2.3 billion in August, from $5.4 billion in August 2025, registering a decline of 57.7 per cent.

Economists ⁠had expected the deficit to ​be $32 billion in August, according to a Reuters poll, ​compared with a deficit of $31.98 billion in the previous month.

India's crude basket averaged $90.19 a barrel in August, up from $82.04 in July, and has climbed to $109.76 so far in September, government data showed.

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Economists had expected the goods trade deficit to be $32 billion in August, according to a Reuters poll, almost matching the value recorded in the previous month.

Gold imports dip sharply

Gold inflow nearly halved to $2.3 billion from $4.16 billion in July, when imports had rebounded sharply on inventory restocking ahead of the festive season.

That helped cut total imports to $70.67 billion from $76.22 billion.

Exports are maintaining positive momentum, driven by a mix of sectors such as engineering, petroleum products, chemicals, and textiles, Agarwal said.

India's exports witnessed major demand from the USA, EU, BRICS countries, and other emerging economies, Agarwal added.

India ​is seeking to diversify ⁠its export ‌markets, with its trade ​deal with ​Britain now in force ⁠and a broader pact with the European ​Union moving towards implementation, potentially opening ​up greater access for domestic goods.

Goods and services exports rose almost 25% year-on-year to $82.68 billion in August, while the trade deficit narrowed to $9.41 billion from $11.62 billion a year earlier, Agrawal said, noting a rise in engineering and electronics goods exports.

Export growth in automobiles and resilient services shipments provided some support to India's overall export performance.

Automobile exports rose 22.2% year-on-year to 681,000 units in August, driven by strong growth in two-wheelers and three-wheelers, though passenger vehicle exports declined 17%, data released by the Society of Indian Automobile Manufacturers on Tuesday showed.

Services exports remained robust at $38.87 billion, while services imports totalled $21.42 billion, resulting in a surplus of $17.45 billion, trade ministry estimates showed.

New ​strikes on ​Saudi Arabia ⁠and on ships in the Gulf are testing nerves in the Middle East, after ​an attack on a Saudi oil pipeline and an advance by Yemen's Houthis threatened to worsen the wartime global crisis.