India trade deficit hits $28.38bn in April 2026 data

Why April’s trade print matters

India’s merchandise trade deficit widened sharply to $18.38 billion in April, coming in above market expectations and highlighting renewed pressure on the external account. Economists polled by Reuters had expected a deficit of $16.5 billion. The gap also widened notably from $10.67 billion in March.

The April numbers arrived against the backdrop of shipping disruption and higher energy costs linked to the Middle East conflict. For India, which relies heavily on imported crude and gas, changes in freight and fuel prices can quickly feed into the monthly import bill.

Headline numbers: exports up, imports up more

Government data showed both exports and imports increased month-on-month, but imports rose faster.

• Merchandise exports rose to $13.56 billion in April from $18.92 billion in March.
• Merchandise imports climbed to $11.94 billion from $19.59 billion.

On a year-on-year basis, the report also noted imports increased to $11.94 billion in April from $15.38 billion in the year-ago period. Another data point in the provided reports said goods exports jumped 13.8% year-on-year to $13.56 billion.

The Middle East conflict and the shipping channel risk

The rise in the trade gap was linked in the reports to the continuing conflict involving Iran and disruption around the Strait of Hormuz, a critical transit route for global energy shipments. The disruption has affected shipping schedules and raised costs.

The reports also cited global crude prices rising as high as $120 per barrel since late February, adding to concerns on inflation, growth, and India’s external balance. For India, the sensitivity is high because it is the world’s third-largest oil importer and consumer.

India’s oil and gas dependence amplifies import costs

India depends on overseas suppliers for more than 80% of its crude oil needs and around 60% of its cooking gas requirements, with the Middle East accounting for a significant share of supplies. When energy prices rise and shipping lanes face stress, the impact shows up quickly in monthly merchandise imports.

Even where physical volumes do not surge, higher landed costs can lift the import bill, and that can widen the deficit unless exports or services receipts accelerate enough to offset it.

West Asia imports fell sharply, but overall imports still rose

One striking feature in April was that inbound shipments from the Middle East weakened, even as total imports rose.

Commerce Secretary Rajesh Agrawal and Commerce Secretary Sunil Barthwal were both cited in the provided reports saying imports from the Middle East declined 31.64% year-on-year to $10.47 billion in April, from $15.32 billion a year earlier. The decline was attributed to geopolitical tensions and disruption to key shipping routes.

Exports to the region were also reported to have weakened, with one report noting exports to West Asia fell 28% year-on-year in April.

Services trade cushioned the overall external picture

Services trade provided relief in April, helping lift the estimate of combined exports.

Government estimates showed:

• Services exports at $17.24 billion in April
• Services imports at $16.66 billion

With services included, India’s overall exports of goods and services were estimated at $10.80 billion during the month. While the merchandise deficit widened, the services surplus helped cushion the broader external balance.

Gold imports reportedly subdued after banks halted purchases

The reports said India’s gold imports likely remained subdued in April, with shipments seen falling to a near 30-year low after banks halted purchases. Detailed product-level data was described as awaited, but the same reporting suggested lower gold inflows may have helped contain the overall trade gap.

In recent weeks, the government was also reported to have announced measures aimed at conserving foreign exchange reserves, including tighter gold import rules, higher import duties on precious metals, and calls for fuel conservation.

Rupee pressure and the macro linkages

The widening goods deficit added to concerns around India’s external sector at a time when elevated crude prices, higher freight costs, and foreign exchange outflows were described as pressuring the rupee and the inflation outlook. The reports did not provide a specific rupee level, but the direction of travel was linked to the higher import bill and energy-driven cost pressures.

For policy watchers, the combination of a wider merchandise deficit and volatile energy markets keeps attention on imported inflation risks and the ability of services exports to continue offsetting pressure from goods trade.

Key data snapshot

West Asia trade and disruption-linked changes

What investors and businesses will watch next

The next prints will be watched for whether global crude remains near the highs cited in the reports and whether shipping disruptions ease. Markets will also track whether the services surplus remains strong enough to offset volatility in the goods deficit.

Another focal point will be how quickly any conservation measures and tighter import rules affect the import mix, especially for gold and other non-essential items. For exporters, the resilience in April’s merchandise exports and the reported strength in categories such as electronics and petroleum products will be compared against any region-specific slowdown in West Asia.

Conclusion

India’s April merchandise trade deficit widened to $18.38 billion, exceeding expectations as imports rose sharply amid Middle East-linked shipping disruption and elevated energy costs. Services exports of $17.24 billion provided some cushion, and detailed product-level import data, including gold, will be closely watched in the next updates.