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Record exports and a widening deficit are both true at once. Here is the FY 2025-26 scoreboard, who India trades with, and the frictions nobody puts in the brochure — because navigating them is our business.
The merchandise trade deficit widened to roughly US$333 billion in FY26. A services surplus near US$214 billion absorbs most of it, leaving an overall deficit around US$119 billion. Translation: India's goods economy imports energy, electronics, machinery and gold at scale, while services and a diversifying non-oil export basket pay much of the bill.
For a trader, deficits are not a moral failing — they are a demand map. Every large import line is a market for whoever can supply it compliantly; every surplus line is proof of competitive origin.
Top export engines: engineering goods, petroleum products, electronics (the fastest riser), pharmaceuticals, gems & jewellery, textiles & apparel, chemicals, agri & processed foods, marine products.
Top import lines: crude oil & gas, electronics & components, machinery & capital goods, gold, chemicals, plastics, edible oils, coal, fertilisers.
Indicative FY25/FY26 figures, rounded. For any country's live agreement status and balance, use the FTA & Tariff Explorer.
| Partner | Two-way trade ≈ | India's balance | Agreement status (Aug 2026) |
|---|---|---|---|
| 🇺🇸 United States | $130bn+ | Surplus ≈ $40bn | Interim framework (Feb 2026); BTA negotiating — verify tariffs per line |
| 🇨🇳 China | $128bn | Deficit ≈ $99bn | No FTA · MFN + expanding QCO/trade-defence layer |
| 🇦🇪 UAE | $100bn | Deficit (oil & gold) | CEPA in force since 2022 |
| 🇪🇺 European Union | €120bn (goods) | Surplus (goods) | FTA concluded 27 Jan 2026 · ratifying · entry expected 2027 |
| 🇷🇺 Russia | $69bn | Deficit ≈ $59bn (energy) | No FTA · INR corridor · per-deal sanctions screening mandatory |
| 🇸🇦 Saudi Arabia | $43bn | Deficit (energy) | India–GCC FTA negotiating |
| 🇬🇧 United Kingdom | $25bn | Surplus | CETA in force 15 Jul 2026 — ~99% lines duty-free |
| 🇦🇺 Australia | $24bn | Deficit (coal, minerals) | ECTA in force 2022; CECA upgrade talks |
| 🇴🇲 Oman | $10.6bn | Deficit (energy) | CEPA in force 1 Jun 2026 |
| 🇧🇩 Bangladesh | $13bn | Surplus ≈ $9bn | SAFTA |
Sources: Ministry of Commerce & Industry releases, PIB, partner-government data. Figures rounded; verify current-year detail per HS line before contracting.
We would rather you hear these from us than discover them at the port. Every one of them is manageable — that is literally what THX is for.
QCO lists, import authorisations and labelling rules change monthly. A product freely importable in January may need a certified foreign factory by June. Our answer: a standing policy watch and per-line verification before every quotation — never after.
2025-26 saw tariffs on Indian goods spike to 50%, an interim framework cut the reciprocal rate to 18% with the punitive layer removed, and US court rulings then reshaped the base again. The only safe posture: rate-check first, contract second. We do exactly that.
Long credit cycles and dollar scarcity in some corridors are real. Our disciplines: advance-plus-documents or LC structures for new counterparties, ECGC cover as open terms begin, and INR settlement where the buyer's bank holds a rupee vostro account.
Dwell times, examination queues and inland haulage variability need buffer planning, not optimism. A licensed broker on the ground — ours — is the difference between a delay and a demurrage bill.
Exporters wait on IGST refunds; importers finance duty upfront. We structure around it: LUT-based zero-rated exports, packing-credit finance against confirmed orders, and honest cash-flow modelling in every proposal.
CAROTAR rules let Indian customs question preferential origin claims; undervaluation attracts SVB investigation. Clean files, real value addition and defensible pricing — the boring virtues — are the entire game.
Well over a hundred correspondent banks from around 30 partner countries hold Special Rupee Vostro Accounts with Indian banks, and the RBI removed prior-approval requirements in 2025. For dollar-scarce buyers in East Africa and South Asia, quoting INR settlement is a closing term, not a gimmick. We verify the buyer's bank on the FEDAI directory before contract and run the BRC trail end to end. Full explainer: Rupee settlement, explained.
In force: UAE, Australia, EFTA (Oct 2025), Oman (Jun 2026), UK (Jul 2026), plus Japan, Korea, ASEAN, Sri Lanka, Mauritius, MERCOSUR & Chile PTAs. Signed / concluded: New Zealand (signed Apr 2026), EU (concluded Jan 2026, ratifying). Negotiating: US BTA, GCC, Israel, Peru, EU follow-ons, ASEAN review. Calendar-driven selling — contracts signed before entry into force — is free margin. Explore any country in the FTA & Tariff Explorer.
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