India's merchandise trade deficit widened to a one-year high of $39.88 billion in October from $30.21 billion in September, commerce ministry data released on Friday showed.

However, the deficit was narrower than the $42.58 billion recorded in October 2025.

Merchandise exports surged 45% year-on-year to a record $49.47 billion from $34.11 billion in October 2025, while imports increased 16.5% to $89.35 billion from $76.69 billion.

Petroleum product exports rose 140.2% to $8.89 billion from $3.70 billion a year earlier, making them a major contributor to overall export growth. This could be due to a rise in prices of oil during the period.

Electronic goods exports increased 62.7% to $6.64 billion from $4.08 billion, while engineering goods shipments rose 36% to $12.74 billion from $9.37 billion.

Gems and jewellery exports grew 40.1% to $3.21 billion from $2.29 billion, and organic and inorganic chemical exports increased 36.2% to $2.89 billion from $2.12 billion.

Non-petroleum exports rose 33.5% to $40.58 billion from $30.40 billion a year earlier.

Exports excluding petroleum products and gems and jewellery increased 33% to $37.38 billion from $28.11 billion, indicating growth across several non-oil export categories.

Gold imports, however, declined 62.6% year-on-year to $5.51 billion from $14.72 billion in October 2025. Still, this is much high than $1.8 billion of imports in September. The government has been trying to curb gold imports and had raised duties to lower its demand.

Despite the strong October export performance, the cumulative merchandise trade deficit widened during the first seven months of 2026-27.

The deficit increased to $218.15 billion during April-October from $199.46 billion in the corresponding period last year, an increase of 9.4%.

Merchandise imports rose 16.4% to $527.21 billion from $452.86 billion, while exports grew 22% to $309.06 billion from $253.40 billion.

On the services side, exports were estimated to have increased 15.2% to $40.51 billion in October from $35.17 billion a year earlier.

Services imports were estimated at $20.72 billion, up 16.9% from $17.73 billion.

The estimated services trade surplus increased to $19.79 billion from $17.44 billion, providing a partial offset to the merchandise trade deficit.

Combining goods and services, India's overall trade deficit narrowed to an estimated $20.09 billion in October from $25.15 billion a year earlier.

Total exports of goods and services increased 29.9% to $89.99 billion from $69.27 billion, while combined imports rose 16.6% to $110.07 billion from $94.42 billion.

During April-October, combined exports increased 16.7% to $568.84 billion from $487.59 billion a year earlier, while imports rose 16% to $662.19 billion from $570.84 billion.

The overall trade deficit during the seven-month period widened to $93.35 billion from $83.25 billion a year earlier.