India’s merchandise trade deficit widened to USD 28.3 bn in Apr-26 from USD 20.7 bn in Mar-26 amidst a relatively faster pace of increase in imports over exports
Download ReportQuantEco Research | Merchandise Trade - April data does not reflect signs of stress
Despite an extremely challenging geopolitical backdrop, India’s total merchandise trade clocked a record high monthly figure of USD 115.5 bn in Apr-26 vs. USD 98.5 bn in Mar-26, backed by strength in both exports and imports. Preliminary data shows a strong pivot in exports towards the East. Meanwhile, massive supply and price disruptions in trade with the Middle East countries prevent one from drawing a clean inference due to significant delays in transportation. Over the medium-term, recently concluded FTAs with the UK, Oman, New Zealand, and the EU, alongside the prospective India-US trade deal, are expected to bolster India's export potential and mitigate the concentration risk. In the near-term, to contain the risk of potentially escalating import bill, the government has initiated demand-side measures on precious metals and fuel consumption to manage the trade deficit. Assuming an average Brent price of USD 85 pb for FY27, we project India's current account deficit at 1.8% of GDP. The outlook hinges critically on the trajectory of the Middle East conflict.