January Trade Numbers Surprise: What’s Driving India’s $34.68 Bln Deficit?

India’s trade performance in January 2026 reflected a mixed picture, with strong services exports offset by widening merchandise deficits. According to Reuters calculations, the services trade surplus stood at $24.30 billion, underscoring India’s strength in IT, consulting, and business services.

On the merchandise side, however, the deficit widened to $34.68 billion, surpassing market expectations of $26 billion. Official data from the Trade Ministry showed imports at $71.24 billion, driven by energy, electronics, and gold, while exports were recorded at $36.56 billion, reflecting global demand pressures.

The divergence highlights India’s reliance on services to balance its external accounts, even as merchandise trade remains vulnerable to global commodity prices and supply chain dynamics. Economists suggest that sustained services growth could cushion the impact of merchandise deficits, but policy support may be needed to boost exports.

Key Highlights

• Services Surplus: $24.30 billion in January (Reuters calculation).
• Merchandise Deficit: $34.68 billion, higher than $26 billion expected (Reuters poll).
• Imports: $71.24 billion (Trade Ministry).
• Exports: $36.56 billion (Trade Ministry).
• Economic Impact: Strong services offsetting merchandise gap; export competitiveness remains a challenge.

Sources: Reuters, India Trade Ministry