India's Trade Deficit Shrinks Significantly Amid Import Declines

In February 2026, India's merchandise trade deficit notably decreased to USD 27.1 billion, primarily due to a significant drop in gold and non-oil non-gold (NONG) imports, as reported by the Union Bank of India.

The report noted a marked decline in imports across key areas, with gold imports down by approximately 40% month-on-month. Despite ongoing global trade tensions, India's export levels remained consistent, underscoring resilience in both goods and services sectors.

The trade deficit's contraction was significantly influenced by a reduction in gold-related deficits, while the oil deficit remained persistently high amidst robust energy demand. Services trade surplus rose, supporting the country's external balance.