India's merchandise trade deficit has narrowed to $26.49 billion in August from $27.35 billion in the previous month as exports surge and imports see a decline, according to the latest Ministry of Commerce & Industry data. The merchandise exports recorded a positive growth of 6.7% in August 2025, reaching $35.1 billion, compared to $32.89 billion in August 2024. Major drivers of merchandise exports growth in August 2025 include electronic goods, engineering goods, gems & jewellery, petroleum products and drugs & pharmaceuticals.

Simultaneously, imports declined by 10.12% to $61.59 billion, down from $68.53 billion in the corresponding period last year. Consequently, the trade deficit narrowed significantly during August.

Reacting to the trade data, SC Ralhan, President, FIEO, said the 6.7% year-on-year growth in exports for August 2025 is a welcome and encouraging sign for India’s export sector, especially in light of ongoing global headwinds and geopolitical uncertainties. The decline in imports by over 10% has also helped in easing the trade deficit, which is now significantly lower compared to the same month last year.

During the period April to August 2025-26, India’s cumulative merchandise exports stood at $184.13 billion, while imports were recorded at $306.52 billion. FIEO Chief emphasised the need for sustained efforts in the coming months to build on this momentum to maintain and accelerate export growth.

The FIEO chief has urged the government for enhanced support for MSMEs and timely disbursement of export incentives to ensure our exporters remain globally competitive especially during these times when the major economies across the globe are facing tariff crisis.

Electronic goods exports surged 25.93% to $2.93 billion in August 2025 from $2.32 billion in August 2024, while engineering goods exports grew 4.91% to $9.90 billion in August 2025. Gems & jewellery exports jumped 15.47%; petroleum products surged 6.54%; and drugs and pharmaceutical exports increased 6.94% on year-on-year basis.

India’s total exports during April-August 2025 are also estimated at $349.35 billion registering a positive growth of 6.18%. Total imports during April-August 2025 is estimated at $390.78 billion registering a growth of 2.49%.

Merchandise exports during April-August 2025 were $184.13 billion vs $179.60 billion in the year-ago period, while merchandise imports were at $306.52 billion vs $300.12 billion in the same period last year. The merchandise trade deficit came in at $122.39 billion as compared to $120.52 billion during April-August 2024. In services, the export value for August 2025 was $34.06 billion, up from $30.36 billion in the year-ago month, while the services imports came in at $17.45 billion, up from $16.46 billion in August 2024.