Trade data for April–August 2026, released by the Department of Commerce on September 15, reveal five important trends.

First, India’s merchandise exports rose 17.9%, from $183.2 billion to $215.9 billion. This is welcome, but much of the increase appears to reflect higher commodity prices and growth in import-dependent products, rather than a broad rise in export volumes or domestic value addition. Petroleum-product exports increased by $10 billion, while imports of crude oil and petroleum rose by $17.6 billion. Electronics exports grew by $7.6 billion, but electronics imports jumped by $20.2 billion. Engineering exports also benefited partly from higher prices of metals, ores and minerals.

Second, exports fell across several agricultural and labour-intensive industries that support millions of farmers, workers and small businesses. Tea exports declined by 15.5%, tobacco by 7.8%, spices by 7.4%, and fruits and vegetables by 10.3%. Among labour-intensive goods, ready-made garments fell by 9.1%, leather products by 4.3%, and ceramics and glassware by 21.6%. Marine products, up 14.3%, were the main exception.

Third, India’s dependence on Chinese imports is increasing. Imports from China rose 27% to $65.5 billion. If this pace continues, they could exceed $157 billion in FY2027, taking India’s bilateral deficit to about $134 billion. These projections could change with prices and trade flows during the rest of the year, but they show the need for a focused strategy to strengthen domestic manufacturing and increase exports to China.

Fourth, imports from Russia surged 56.7% to $41.1 billion in the first five months of FY2027. At this pace, they could approach $100 billion for the full year, leaving India with a bilateral deficit of about $94 billion. Discounted Russian oil may save India foreign exchange, but India also needs a plan to expand exports to Russia.

Fifth, the rupee’s depreciation makes trade growth look much stronger in domestic-currency terms. Exports rose 17.9% in dollars but 30.3% in rupees, while imports increased 18.2% in dollars and 30.6% in rupees. A weaker currency can make Indian goods more competitive abroad, but the benefit is limited because leading exports such as petroleum products and electronics rely heavily on imported inputs. Depreciation makes these inputs more expensive, reducing exporters’ gains while raising India’s overall import bill.

Taken together, the data show that strong headline export growth masks deeper weaknesses: high dependence on imported inputs, falling shipments from job-rich sectors, widening deficits with China and Russia, and rising costs from a weaker rupee. India needs to focus on expanding domestic value addition, restoring competitiveness in labour-intensive industries, and pursuing targeted export strategies for its largest sources of imports.