Editor’s Note
India’s merchandise trade deficit widened in Q1 FY2026, driven largely by imports of petroleum, electronics, and gems & jewellery. These three categories alone accounted for a deficit of $65.9 billion, surpassing the overall trade deficit of $37.42 billion, underscoring their outsized impact on the country’s trade balance.
New Delhi: During the period from April to June 2026, petroleum, electronics, and gems and jewellery remain the three largest import items. The increase in imports of these items is widening India’s merchandise trade deficit, as imports exceed exports. Data from the Ministry of Commerce revealed that in the first quarter of the fiscal year, the trade deficit from petroleum, electronics, and gems and jewellery stood at $65.9 billion, while the total trade deficit for the same period was $37.42 billion.
In June alone, imports of petroleum and crude oil rose 23% year-on-year, reaching $19.32 billion. Meanwhile, imports of electronic goods surged 43.76% to $13.36 billion. Gold imports increased by 47.1% to $1.96 billion. However, according to official data released on Monday, silver imports fell sharply by 42.7% to $0.06 billion.
Officials from the Ministry of Commerce stated that in June, imports of petroleum, electronics, and gems and jewellery resulted in a net increase of $20 billion in the trade deficit.
He attributed the rise in electronics imports to the country’s growing middle class, disposable income, and demand.
Meanwhile, India’s total merchandise trade deficit in June widened to $30.43 billion. Merchandise exports in June 2026 rose 15.52% year-on-year to $40.41 billion, while merchandise imports surged 31% to $70.84 billion last month. However, the trade deficit increased significantly compared to May 2026, when it was $28.21 billion, as merchandise exports had fallen from $45.2 billion that month.
On a positive note, India’s exports to the Middle East began to improve in June, rising 7.29% year-on-year to $5 billion. Agarwal said,