India's merchandise exports during the April-June quarter (Q1) of FY 2026-27 recorded an all-time quarterly high of $129.6 billion, compared to $111.6 billion in the corresponding period of the previous year, registering a robust growth of 16.1 per cent, and reflecting the underlying strength of India's export performance despite monthly fluctuations in the trade deficit, the Parliament was informed on Tuesday.

The merchandise trade deficit of $30.4 billion in June 2026, which was reported as a five-month high, was only marginally higher than the 12-month average deficit of $29.3 billion, indicating that the June 2026 deficit remained broadly in line with the average level, Minister of State for Commerce and Industry Jitin Prasada said in a written reply to a question in the Lok Sabha, adding that the government closely monitors trade performance, including the merchandise trade deficit.

A single month’s deficit does not, by itself, reflect overall trade performance due to the seasonal nature of merchandise trade. The increase in the merchandise trade deficit largely reflects higher imports of essential and productive goods required for economic growth, industrialisation and export competitiveness, rather than any structural weakness in India's external sector, the minister said.

A significant share of India's imports comprises crude oil, electronic goods, machinery and capital goods, gold and precious stones, fertilisers and other intermediate inputs, which are essential for meeting domestic consumption requirements, ensuring energy security, supporting manufacturing, infrastructure development and industrial expansion.

The largest contributor to imports continues to be petroleum products, accounting for about 26 per cent of India's total imports in FY 2025-26, and therefore fluctuations in international crude oil prices have a significant impact on the merchandise trade balance. Imports of machinery and capital goods and electronic goods together accounted for nearly one-fourth of India's imports and have increased in line with growing industrial activity, digitalisation and integration with global value chains. Imports of gold, precious stones and gems, which accounted for about 14 per cent of total imports, also contributed to the higher import bill, while imports of fertilisers and other industrial inputs remained necessary to support agriculture and domestic production, the minister said.

Prasada said that the government has adopted a comprehensive strategy aimed at achieving the twin objectives of reducing critical import dependence through domestic capacity creation while simultaneously promoting exports through improved competitiveness, market access and deeper integration with global value chains.

These measures have significantly reinforced India’s external sector. Despite global uncertainties, India achieved record exports of $863.1 billion in FY 2025-26, comprising $441.8 billion in merchandise and $421.3 billion in services. The strong momentum continued in April–June FY 2026-27, with merchandise exports reaching $129.54 billion, the highest-ever quarterly performance in India’s history. This achievement highlights the resilience of the external sector and the growing competitiveness of Indian exports in a challenging global trade environment. Government policies have strengthened export competitiveness, boosted domestic production, and reduced external vulnerabilities, while ongoing efforts continue to build a resilient and globally competitive economy, the minister added.