India's Trade Gap Shrinks: Deficit Falls to $27.1 Billion on Export Growth in February 2026

In February 2026, India's trade deficit decreased to $27.1 billion from $34.68 billion observed in January.  

This change was due to a combination of marginal growth in exports and a reduction in imports, despite economic challenges and the impact of global events. 

Narrowing February Trade Gap 

India witnessed a narrowing of its trade deficit in February 2026, reaching $27.1 billion compared to the previous month's $34.68 billion.  

Goods exports experienced a slight increase to $36.61 billion from $36.56 billion in January, while imports fell to $63.71 billion from $71.24 billion.  

Despite the monthly improvement, the year-on-year trade gap grew from $14.42 billion in February of the prior year, driven by changes in key import categories. 

Impact of Rising Imports 

The increase in the deficit, when compared year-on-year, was largely due to notable rises in the import values of gold and silver.  

In February, India's gold imports surged by 218.55% to $7.45 billion, while exports of silver rose by 285.23% to $1.66 billion.  

These figures highlight a significant increase in the value of precious metals brought into the country during this period. 

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Drivers of Export Growth 

The month also saw certain sectors driving growth in exports. Engineering goods rose by 12.90%, electronics by 10.4%, organic and inorganic chemicals by 6.85%, and gems and jewellery by 4.1%.  

Meat, dairy, and poultry products recorded the most significant growth at 22.7%. These sectors collectively contributed to stabilising the export value amidst high imports. 

US Market Performance 

In February, exports to the United States, India's largest export market, increased by 3.5% compared to January, totalling $6.9 billion. Yet, on an annual basis, this represented a decrease of nearly 13%.  

The shift in trade values between months and years underscores dynamic market conditions and ongoing geopolitical uncertainties. 

Conclusion 

India's trade deficit narrowing to $27 billion in February 2026, from January's $34.68 billion, presents a significant monthly improvement, though challenges remain. Economic factors, such as the rise in gold and silver imports, continue to influence the broader trade environment. 

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