India's merchandise exports scaled an all-time quarterly high of $129.6 billion in the April–June quarter (Q1) of FY 2026-27, surging 16.1 per cent from $111.6 billion in the same period last year, the government informed Parliament on Tuesday, 11 August 2026. The figure underscores the resilience of India's external sector even as monthly trade deficit readings drew scrutiny.

What the Government Said

Minister of State for Commerce and Industry Jitin Prasada disclosed the data in a written reply to a question in the Lok Sabha. He noted that the merchandise trade deficit of $30.4 billion in June 2026 — reported as a five-month high — was only marginally above the 12-month average deficit of $29.3 billion, suggesting the June figure remained broadly in line with prevailing trends.

Prasada cautioned against reading too much into a single month's deficit, pointing to the seasonal nature of merchandise trade. 'A single month's deficit does not, by itself, reflect overall trade performance,' he said, attributing the higher import bill to 'essential and productive goods required for economic growth, industrialisation and export competitiveness.'

What Is Driving the Import Bill

The minister identified petroleum products as the single largest import category, accounting for roughly 26 per cent of India's total imports in FY 2025-26, making the trade balance sensitive to swings in international crude prices. Machinery, capital goods, and electronic goods together accounted for nearly one-fourth of total imports, rising in step with industrial activity and digitalisation. Gold, precious stones, and gems contributed approximately 14 per cent of the import bill, while fertilisers and industrial inputs remained necessary to support agriculture and domestic production.

Record Full-Year Exports in FY26

Prasada also highlighted that India achieved record total exports of $863.1 billion in FY 2025-26, comprising $441.8 billion in merchandise and $421.3 billion in services. The strong momentum carried into the current fiscal year, with Q1 FY27 merchandise exports of $129.54 billion marking the highest-ever quarterly performance in India's export history.

Government Strategy and Outlook

According to Prasada, the Centre has adopted a dual-track strategy: reducing critical import dependence through domestic capacity creation while simultaneously boosting export competitiveness, market access, and integration with global value chains. He credited government policies with strengthening export performance and reducing external vulnerabilities. This comes amid an uncertain global trade environment shaped by geopolitical tensions and shifting supply chains — conditions that have pressured exports in several competing economies. India's ability to post record quarterly numbers in this context is being cited as evidence of structural improvement in the external sector. Whether the momentum holds will depend in part on crude oil price trajectories and the pace of global demand recovery.