India’s merchandise trade gap widened sharply in January 2026, climbing to a three-month peak as a surge in imports far outpaced modest export growth.

The country’s goods trade deficit stood at $34.68 billion during the month, with total imports rising 19.19% year-on-year to $71.23 billion, according to a report by The Hindu Businessline.

This marks a significant jump from January 2025, when the deficit was recorded at $23.43 billion.

The spike in imports was driven largely by a sharp increase in gold and silver purchases, even as outbound shipments saw only a marginal uptick. Exports in January rose 0.61% year-on-year to $36.56 billion, reflecting relatively subdued growth compared to the strong import momentum.

At a media briefing on Monday (February 16), outlining the broader trade outlook, Commerce Secretary Rajesh Agrawal said, “The country’s exports remain northwards both in goods and services… We expect to be in the vicinity of $860 billion overall exports in the current fiscal. And in services we expect to be over $410 billion.”

In FY25, India’s combined exports of goods and services reached $825.3 billion, registering a 6.1 per cent year-on-year (y-o-y) growth. However, merchandise exports remained largely stagnant at $437.42 billion, the report noted.

On the import front, China retained its position as India’s largest source of goods in January 2026. Inbound shipments from China rose 16.67% year-on-year to $12.23 billion. Precious metals recorded especially steep increases, with gold imports soaring 349.22% to $12.07 billion and silver imports jumping 127% to $2 billion, significantly contributing to the elevated trade deficit.