Flat exports, high gold imports take deficit to 3-month high: Tariffs pull down exports to US

Tue Feb 17 2026

India’s Trade Deficit Hits 3-Month High of $34.68 Billion as Gold Imports Surge and US Tariffs Sting

India’s merchandise trade deficit stood at a three month high of $ 34.68 billion in January driven by a significant increase in imports of gold and silver while exports stagnated due to high additional US tariffs.

The export growth in January was at 0.61% to $ 36.56 billion as shipments to the US fell 21.7% on year during the month to $ 6.60 billion from $ 8.43 billion in the same month of the previous fiscal. Exports to US in April-January still remains in positive territory growing at 6.73% to $ 72.46 billion

Precious Metals Drive Import Bill

Merchandise imports during January were up 19.2% to $ 71.24 billion. Imports of gold were up 359% to $ 12.07 billion, which was $ 9.37 billion more than the same month of last year.  Silver exports grew 127% to $ 2.00 billion. The drivers of this increase in value of gold and silver imports are their high prices in the international market.

Services Sector

The support to overall exports in January came from the services sector that expanded 26.33% to $ 43.90 billion. Overall exports in January were up 13.16% up to $ 80.45 billion. In April-January overall exports have grown 6.15% to $ 720.76 billion.

“Overall, we are registering a growth rate of 6.15%, which is a good growth rate. And in the last two months also, we hope to go on the same trajectory. We are well-poised to cross maybe $ 850 billion, I had said last time. But it seems like we will be nearing $860 billion in terms of overall exports in this financial year,” commerce secretary Rajesh Agrawal told reporters.

In services, we will look like we will be crossing beyond $410 billion for the first time in this current year, he added. In 2024-25 India’s overall exports stood at $ 825.25 billion with services contributing $ 387.54 billion.

While exports to the biggest market US have suffered, shipments to UAE, China, Hong Kong, Netherlands and Italy have experienced higher growth during the month of January. The exports to China were up 55.65 % on year to $ 1.67 billion during the month. Growth in the UAE market was 29.27%,  Hong Kong 98.72%, Netherlands 20.47% and Italy 32.1%.

The major driver of the exports was the engineering sector where shipments grew 10.37% to $ 10.40 billion. meat, dairy. poultry; marine, coffee, cereals, iron ore and other minerals.

The electronics sector exports that were growing at 35.08% in April-December – saw a flat growth of 0.32% in January. The traditional sectors like textile and garments, carpets and handicraft all saw a contraction in shipments.

Source: https://www.financialexpress.com/