Ralhan cautions rising import bill, calls for attention to widening trade deficit
India’s merchandise exports delivered a spectacular performance in July 2026, growing by over 19 per cent to a record US$44.24 billion, the highest-ever merchandise export value recorded for the month of July. The sharp growth assumes even greater significance against the backdrop of persistent geopolitical uncertainties, shipping and logistics disruptions, elevated freight costs and volatility in key global markets.
Commenting on the trade data, S C Ralhan, President, Federation of Indian Export Organisations (FIEO), said on 13 Aug, “The over 19 per cent growth in merchandise exports in July is an outstanding achievement and a strong testimony to the resilience, competitiveness and adaptability of Indian exporters. Achieving record exports despite continuing disruptions in global logistics and supply chains, besides higher transportation costs, demonstrates the ability of Indian businesses to respond swiftly to an increasingly complex global trading environment.”
Ralhan said that the performance during April–July 2026-27 reinforces this positive trend. Merchandise exports increased by 17.04 per cent to US$173.78 billion, while India’s overall exports of merchandise and services grew by 13.16 per cent to US$316.42 billion. Particularly encouraging is the 12.79 per cent growth in non-petroleum exports, indicating that the export momentum is broad-based and increasingly supported by manufacturing and value-added sectors.
“The strong growth in non-petroleum exports is an important indicator of the underlying strength and diversification of India’s export basket. Engineering, electronics, pharmaceuticals, chemicals, textiles and other manufacturing sectors are contributing meaningfully to this momentum. Going forward, a sharper focus on MSMEs and labour-intensive sectors will help translate export growth into greater employment and wider economic benefits,” he added.
Among the major export categories, engineering goods emerged as the largest, followed by petroleum products, electronic goods, drugs & pharmaceuticals, organic & inorganic chemicals, gems & jewellery, readymade garments, cotton yarn/fabrics/made-ups and handloom products, rice, and plastic & linoleum. The strong presence of manufacturing and value-added products among the leading export categories augurs well for the structural transformation of India’s exports.
FIEO President also highlighted the encouraging geographical spread of exports. The US, UAE, Singapore, China, Netherlands, UK, Germany, South Africa, Bangladesh and Tanzania were among India’s leading export destinations during April–July 2026-27.
“While resilience in major markets such as the US, EU and China is encouraging, the growing presence of Indian products in the UAE, Singapore, Africa and other emerging markets reflects the conscious efforts of exporters to diversify. In the current uncertain environment, deeper market and product diversification will remain one of our most effective risk-mitigation strategies,” he said.
At the same time, Ralhan cautioned that the rising import bill and widening trade deficit require attention. Merchandise imports reached US$76.22 billion in July, resulting in a merchandise trade deficit of US$31.98 billion. During April–July, merchandise imports grew by 19.27 per cent, compared with 17.04 per cent growth in merchandise exports. Overall imports of goods and services increased from US$311.94 billion to US$365.85 billion, taking the overall trade deficit from US$32.32 billion to US$49.43 billion.
“While imports of energy, capital goods and intermediates are also associated with higher domestic economic activity, we need to simultaneously strengthen domestic manufacturing capabilities in critical inputs, electronics, machinery and other areas of high import dependence. Export expansion and strategic import substitution should complement each other in strengthening India’s external sector,” Mr Ralhan observed.
Looking ahead, Ralhan said that sustaining the present export momentum would require continued policy support, particularly as geopolitical tensions, shipping disruptions, freight volatility and evolving trade policies remain significant risks to global commerce.
“Indian exporters have once again demonstrated that they can deliver even under difficult circumstances. The need now is to build on this momentum through a responsive trade policy framework, adequate and competitive export credit, easier access to working capital, faster trade facilitation and urgent attention to shipping and logistics challenges. Special support to MSMEs and labour-intensive sectors, together with aggressive market diversification, will further strengthen India’s export competitiveness,” he said.
“With continued partnership between the Government and industry, we are confident that India can sustain this momentum and move decisively towards a stronger, more diversified and globally competitive export economy,” Ralhan added. fiinews.com
