India's Trade Deficit Narrows to $26.86 Billion in August on Export Surge

India's merchandise trade deficit narrowed significantly in August 2026, falling to $26.86 billion as a surge in exports outpaced the growth in imports, according to official data released by the Department of Commerce on Tuesday. The deficit was down from $31.98 billion in July and marked an improvement from the $27.22 billion recorded in August 2025. The data showed that merchandise exports grew 26% year-on-year to $43.81 billion in August. This robust expansion was driven by strong performance in sectors including engineering, petroleum products, chemicals, and textiles. Commerce Secretary Rajesh Agrawal stated that major demand for Indian goods is coming from the United States, the European Union, and emerging markets. On the import side, merchandise purchases rose 14% year-on-year to $70.67 billion. The differential growth rates, with exports expanding much faster than imports, were the primary factor behind the narrowing trade gap. The result was better than the approximately $32 billion deficit that economists had forecast in a Bloomberg survey.