India’s merchandise exports grew marginally in January to $36.56 billion, up 0.61%. On the other hand, imports rose sharply by 19.2% to $71.24 billion, compared to $59.77 billion in the same period last year. As a result, the country’s trade deficit widened to $34.68 billion in January.Exports continued to remain on an upward trajectory in both goods and services segments. According to Commerce Secretary Rajesh Agrawal, the total exports of goods and services are expected to cross $860 billion during the current financial year.For the April to January period, exports increased by 2.22% to $366.63 billion.

Trump tariffs hit India’s exports to US

India’s exports to the US also fell by 21.77% to $6.6 billion in January, largely due to the 50% tariffs imposed by the Donald Trump administration.The US imposed a broad 50% tariff on Indian goods entering its market from August 27. The two countries have since concluded an interim trade arrangement under which the US removed 25% penal tariffs on Indian products from February 7, while reciprocal tariffs are set to be reduced to 18% from 25%. India’s exports are now competitively placed among regional peers.Exports had also contracted in September, October and December last year, although shipments had seen a growth of 22.61% in November. Imports from the United States, meanwhile, increased by 23.71% to $4.5 billion in January, the data showed.During the April to January period of the current financial year, India’s exports to the US rose by 5.85% to $72.46 billion, while imports grew by 13.87% to $43.92 billion.Exports to China surged by 55.65% to $1.63 billion during January, while imports from China rose 16.67% to $12.23 billion. For the April-January period of the fiscal year, exports to China increased by 38.37% to $15.88 billion, whereas imports expanded by 13.82% to $108.18 billion.India’s exports to countries including the UAE, Netherlands, Germany, Saudi Arabia, Italy, Hong Kong, Spain, Belgium, Malaysia and Vietnam recorded positive growth during the month under review. In contrast, shipments to the UK, Bangladesh, Singapore, Australia, France and Brazil declined.On the import side, inflows fell from countries such as Russia, Iraq, Korea, Germany, Thailand and Australia, while imports increased from the UAE, Saudi Arabia, Switzerland, Singapore, Japan and Indonesia. India primarily imports gold from Switzerland, and purchases from the country jumped sharply by 836.85% in January to $3.95 billion.

India’s Diversifying Exports Basket

According to the Global Trade Research Initiative (GTRI), the latest trade figures for January 2026 reflect the significant impact of US tariffs on India’s export performance, while also indicating early signs of diversification into other markets.“Shipments to the United States followed a clear three-phase pattern between April 2025 and January 2026. After a brief uptick in May, exports fell steadily from $8.3 billion in June to $5.5 billion in September as tariff pressures intensified. A short-lived recovery followed, with exports rising to $6.3 billion in October and $7.0 billion in November, but the rebound faded when hopes of a quick trade deal did not materialise. Exports slipped again to $6.9 billion in December and $6.6 billion in January. With Washington expected to cut reciprocal tariffs on most Indian goods from 50% to 18% this week, we anticipate a swift recovery in shipments,” said GTRI in a note.The broader data suggest that the slowdown is largely concentrated in shipments to the US rather than reflecting a global decline. “Exports to the rest of the world remained resilient, edging up from $29.9 billion to $30.0 billion (+0.3%). The figures suggest that tariff barriers in the US market have driven India’s recent export slowdown, even as exporters begin cautiously expanding beyond their largest single market,” GTRI added.