India’s trade surplus with US Narrows in FY26, China exports surge

India’s trade surplus with the United States narrowed in the financial year 2025–26, even as exports registered modest growth, weighed down by a sharp rise in imports, according to data released by the Commerce Ministry.According to information,exports to the United States stood at USD 87.31 billion during April 2025–March 2026, marginally higher than USD 86.51 billion recorded in the previous financial year. However, imports from the US rose significantly to USD 52.90 billion, compared with USD 45.63 billion a year earlier.
As a result, India’s trade surplus with its largest export destination declined to USD 34.41 billion in FY26 from USD 40.88 billion in FY25, reflecting the impact of rising inbound shipments.Despite the contraction in surplus, the United States retained its position as India’s top export market. Other key destinations included the UAE, China, the Netherlands, the United Kingdom, Singapore, Germany, Bangladesh, Saudi Arabia, and Hong Kong, indicating a broad-based export footprint.
A notable trend during the year was the sharp rise in exports to China, which grew by 36.7 per cent to USD 19.48 billion from USD 14.25 billion in FY25. This made China the fastest-growing major export destination for India, driven by increased shipments across select sectors.However, India’s dependence on Chinese imports remained pronounced. Imports from China climbed to USD 131.63 billion in FY26, up from USD 113.45 billion in the previous year, continuing to exert pressure on the overall trade balance.Exports to the UAE also saw a steady uptick, rising to USD 37.37 billion from USD 36.64 billion. In contrast, shipments to some European markets, including the Netherlands and the United Kingdom, witnessed moderation, suggesting uneven demand conditions across regions.
On the import side, China remained India’s largest supplier, followed by the UAE, Russia, and the United States, underlining the concentration of sourcing in a few key geographies.
Commenting on recent trade movements,Commerce Secretary Rajesh Agarwal attributed fluctuations in trade during March 2026 to geopolitical developments, particularly the ongoing tensions in the Middle East. He noted that exports to the region declined by about USD 3.5 billion, registering a sharp fall of nearly 58 per cent, while imports from the region also dropped by over 51 per cent, amounting to around USD 8.7 billion.The latest data highlights a shifting trade dynamic, where steady export growth is being offset by rising imports, particularly from major partners such as the US and China. This trend has begun to compress India’s trade surplus with key economies, even as the country expands its presence across global markets.

(Business Correspondent)