India's exports rose 15.5% year-on-year to $40.41 billion in June, even as the trade deficit widened to a five-month high of $30.43 billion, driven by a sharp surge in imports fuelled mainly by higher crude oil prices. The widening gap underscores how rising global energy costs continue to weigh on India's overall trade balance, even as the country's export engine shows resilient growth across several key sectors.

Key Highlights

• India's exports rose 15.5% to $40.41 billion in June, while imports surged 31% on higher crude prices.
• Trade deficit widened to a five-month high of $30.43 billion, driven mainly by rising crude oil imports.

Crude Oil Imports Surge 40%

Crude oil imports jumped 40% to $19.32 billion during the month, emerging as the single biggest driver of the rise in India's import bill. The country's overall merchandise imports climbed about 31% to $70.84 billion in June. Notably, oil prices had touched around $90 per barrel in the first half of June - a level that significantly inflated the country's oil import costs - before easing to below $80 per barrel later in the month, offering some relief on the pricing front even as volumes remained elevated.

Electronics, Machinery, and Gold Imports Climb Sharply

Beyond crude oil, inbound shipments of precious metals, electronics, and machinery further added to the country's import bill in June. Electronics imports grew sharply by 58.77% to $13.4 billion, reflecting continued strong domestic demand for imported components and devices. Machinery imports rose 30.9% to $5.8 billion, while gold imports climbed 7% to $2 billion - together painting a picture of broad-based import growth across both essential and discretionary categories.

Also Read: India Exports Jump 18% to $45.2B in May; Trade Deficit Hits $28.21B

Q1 FY27 Trade Deficit Widens Sharply

Looking at the broader quarterly picture, exports during April-June this fiscal rose 15.92% to $129.32 billion, while imports climbed at a faster pace of 19.89% to $216.18 billion. As a result, the merchandise trade deficit for Q1 FY27 widened significantly to $86.86 billion, compared with $68.75 billion in the same period last year - a year-on-year increase of more than $18 billion. For context on how the trade gap has moved recently, it stood at just $19.1 billion in June 2025 and $34.68 billion in January this year, highlighting how much the deficit has fluctuated in recent months. Gold imports for the quarter alone rose sharply to $11.01 billion, up from $7.49 billion in the April-June period last year.

Briefing the media on the data, Commerce Secretary Rajesh Agarwal said, "India's exports are registering healthy growth in areas such as electronics, iron ore, handicrafts, meat, and dairy products, pointing to diversification beyond India's traditional export categories. The main countries where India's exports recorded a jump in shipments included South Africa, Singapore, China, Oman, and Malaysia, reflecting growing trade momentum across both established and emerging markets."

Exports to West Asian countries rose 7.29% to $5 billion in June, Agarwal said, marking a notable rebound after shipments to the region had declined in April and May due to the ongoing regional crisis. To sustain trade flows despite the disruption, India routed shipments through three ports in Oman - Duqm, Sohar, and Salalah - as the US-Iran conflict has severely impacted the movement of cargo-carrying ships in international waters, particularly through the Strait of Hormuz, one of the world's most critical shipping chokepoints for oil and trade.

Services Trade Remains a Bright Spot

Separately, government estimates showed services exports stood at a robust $33.03 billion in June, while services imports came in considerably lower at $17.92 billion - underscoring the continued strength of India's services sector as a counterbalance to the widening merchandise trade deficit.