Exports flat in Feb, shipments to US down 13%

India’s merchandise exports slipped 0.8% in February as shipments to the US declined 13%, while the trade deficit stood at $27.1 billion despite slower imports.

Written by Mukesh Jagota

March 16, 2026 23:45 IST

Engineering goods and electronics exports supported overall shipments in February, but higher gold and electronics imports kept India’s trade deficit elevated.

Export of merchandise fell 0.8% year-on-year to $36.61 billion in February, but the trade deficit contracted sequentially to $27.1 billion from $34.68 billion in January, due to a month-on-month slowing of imports. February trade deficit was, however, much higher than $14 billion in the year-ago month which saw both exports and imports fall steeply.

According to official data released on Monday, the trade deal with the US, following the scrapping of reciprocal tariffs by the US Supreme Court, could not support merchandise exports in February.

While exports stagnated, merchandise imports rose 24.1% year-on-year to $63.71 billion during February. In April-February the trade deficit with China reached $102.02 billion, up from $99.19 billion in the whole of 2024-25. The drivers of import growth from China are raw materials, electronics components and batteries.

Engineering exports record growth in Februrary

Within the product groups, the exports in February were supported by engineering goods and electronics. Engineering goods exports grew 12.9% to $10.3 billion, while electronics shipments expanded by 10.3% to $4.1 billion. Chemicals, pharma, gems and jewellery, and food items were other contributors.

On February 6, India and the US announced a trade deal that immediately brought down additional tariffs on Indian goods to 25% from 50%. Subsequently, on February 20, the additional tariffs were invalidated. However, during the month, exports to the US, India’s biggest market, were down 12.8% to $6.8 billion.

Trade works with a lag

As trade works with a lag, the impact of lower additional tariffs that apply equally to all countries will be seen in subsequent months. As tariffs got sorted out, the war in West Asia has come as a shock to exports that might linger for the initial months of the next financial year beginning April 1.

For this year the war would impact potential exports but overall exports would be around $860 billion, Commerce Secretary Rajesh Agrawal said.

In 2024-25, combined exports of goods and services were $825.25 billion while in April-February this year, that figure stood at $790.86 billion. For next year, the government sees a challenge but will navigate it, he added.

Import drivers in February included gold, up 218% to $7.4 billion; silver, up 285% to $1.6 billion, electronics goods up 33.4% to $10.1 billion; and machinery up 23.5% to $5.3 billion.

Services exports in February grew 24.8% to $39.5 billion, while imports were up 12.8% to $16.3 billion.

In April-February merchandise exports grew 1.8% to $402.9 billion, while imports were up 8.5% to $713.5 billion. Services exports in the first eleven months of this fiscal were up 10.2% to $ 387.9 billion while imports were up 3.1% to $ 186.9 billion.

Overall exports in April-February were up 5.8% to $790.8 billion, while imports grew 7.3% to $900.5 billion.

This article was first uploaded on March sixteen, twenty twenty-six, at forty-five minutes past eleven in the night.