India’s trade deficit widens to  $34.68 billion in January amid gold import surge

India’s trade deficit widened to $34.68 billion in January 2026 from $25.04 billion in December, even as the country recorded steady growth in overall exports, driven by resilient services shipments and improving demand in key markets, Commerce Secretary Rajesh Agrawal said on February 16. 

The increase in the deficit was largely attributed to a surge in gold and silver imports amid elevated global prices. 

Merchandise exports during January stood at $36.56 billion, declining from $38.51 billion in December, while imports rose sharply to $71.24 billion from $63.55 billion, reflecting higher inbound shipments of precious metals. 

Despite the monthly widening, cumulative export performance remained positive. Exports between April 2025 and January 2026 rose 2.22% year-on-year to $366.63 billion, with the government expressing confidence that total goods and services exports could cross $860 billion in the current fiscal year. 

Overall exports during the 10-month period grew 6.15% to $720.76 billion, compared with $679.02 billion in the corresponding period last year. Services continued to outperform, rising to $354 billion from $320 billion a year earlier. 

Exports to the US, India’s largest trading partner, increased to $72.46 billion during April-January, up from $68.46 billion in the same period last year. 

Precious metals drive import surge 

On the import front, gold played a major role in pushing up the deficit. The value of gold imports rose 1.83% in January, despite lower volumes, as unit prices jumped 24.62%, according to official data. Silver imports also increased, adding further pressure on the monthly trade balance. 

The Commerce Ministry expects export momentum to continue through February and March 2026, keeping the country on track to surpass the $860 billion export mark by the end of the financial year. Merchandise exports alone are projected to exceed $410 billion for the first time. 

Trade negotiations gain traction 

Officials also highlighted progress on multiple trade agreements. A joint statement has been signed with the United States outlining the contours of a proposed deal, which will now be translated into a legal framework. 

India’s chief negotiator Darpan Jain is scheduled to visit Washington to advance discussions, with both sides aiming to finalise the legal agreement around March 2026, though no formal deadline has been set.

Tariffs announced earlier by US President Donald Trump — to be reduced from 25% to 18% — are expected to be implemented in due course, Agrawal said. 

Separately, negotiations are progressing on multiple trade pacts: 

• Talks with Chile include a proposed chapter on critical minerals, marking a first-of-its-kind inclusion in a bilateral FTA. 
• Engagement with Canada continues toward signing a comprehensive agreement. 
• India and the United Kingdom are working to meet an April deadline for concluding their long-pending FTA.