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India's US Trade Surplus Shrinks in FY26 as Imports Surge, China Exports Boom

India's trade surplus with the United States contracted in FY 2025-26, falling to $34.41 billion from $40.88 billion the previous year. This occurred despite the US remaining India's top export destination, as a sharp rise in imports from the US outpaced marginal export growth. In contrast, exports to China surged by 36.7%, making it the fastest-growing major export market. Commerce Secretary Rajesh Agrawal cited the Middle East crisis as a key factor behind a significant decline in exports to that region in March 2026.

Key Points: India's US Trade Surplus Narrows, Exports to China Surge in FY26

  • US trade surplus narrows
  • Exports to China surge 36.7%
  • Imports from US rise sharply
  • Middle East crisis impacts March trade
3 min read

India's US trade surplus shrinks in FY26 despite export growth, exports to China surge

India's trade surplus with the US fell in FY26 despite export growth, as imports jumped. Exports to China surged over 36%, data shows.

"One of the key reasons... has been the challenges on trade front, due to Middle East crisis - Commerce Secretary Rajesh Agrawal"

New Delhi, April 15

India's trade surplus with the United States narrowed in FY 2025-26, amid a decline in export momentum following tariff measures imposed by US President Donald Trump, even as imports from the US rose significantly.

According to data released by the commerce ministry, India's exports to the US stood at USD 87.31 billion during April 2025-March 2026, registering only a marginal rise from USD 86.51 billion in the previous financial year. However, imports from the US increased sharply to USD 52.90 billion from USD 45.63 billion.

Consequently, India's trade surplus with the US declined to USD 34.41 billion in FY26, down from USD 40.88 billion in FY25.

However, US continued to remain India's top export destination during the year. Other key export markets included the UAE, China, the Netherlands, the UK, Singapore, Germany, Bangladesh, Saudi Arabia and Hong Kong.

Exports to China also recorded a notable surge during the year as exports in FY26 surged to USD 19.48 billion from USD 14.25 billion in FY24-25, with China emerging as the fastest-growing export destination among the top markets, registering a growth of 36.7 per cent. This reflects strengthening trade engagement with China. However, the imports are also high as it surged to USD 131.63 billion in FY26 which is a sharp surge from 113.45 in FY25.

Exports to the UAE also rose to USD 37.37 billion in 2025-26 from USD 36.64 billion in the previous year. However, exports to some European markets such as the Netherlands and the UK saw moderation during the period.

On the import side, China continued to be India's largest import source, followed by the UAE, Russia and the US. Imports from China remained significantly higher compared to other trading partners, underscoring India's dependence on Chinese goods across sectors.

Commerce Secretary Rajesh Agrawal on export and Import decline in March 2026 said, "One of the key reasons we don't need to find reasons also here has been the challenges on trade front, due to Middle East crisis, our exports to Middle East in the month of March has dipped by USD 3.5 bn. Our exports to Middle East in the month of March has gone down to by 3.5 bn. In percentage term It has been a decline of 57.95 per cent. There has been a decline of import also. The import decline from Middle East is 51.6 per cent which is around USD 8.7 billion".

Overall, the data indicates that while India's exports to key markets such as the US and China have increased, rising imports--particularly from the US--have impacted the trade balance, leading to a decline in surplus with one of its largest trading partners.

- ANI

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Reader Comments

P
Priyanka N
The data shows our economy is getting more connected globally, which is good. But the Middle East crisis impact is huge! A 57% drop in exports there in March is shocking. Our diplomacy needs to work overtime to secure these trade routes. 🇮🇳
A
Aman W
Exports to China up by 36.7% is the real story here! It shows our businesses are finding new markets despite geopolitical tensions. We should build on this momentum. However, we must be cautious and not become overly reliant on any single country for trade.
S
Sarah B
From an outside perspective, India's trade dynamics are fascinating. The US remains the top destination, but the growth is with China. The Trump tariffs seem to have had a real effect in slowing the momentum with the US. India's challenge is balancing relationships with both economic giants.
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Karthik V
While the headline focuses on the US surplus shrinking, the elephant in the room is the $131 BILLION import bill from China. That's unsustainable. Every mobile phone, toy, and electronic component adds to this deficit. We need a national strategy to manufacture these goods here.
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Nikhil C
A respectful criticism: The government's PLI schemes have been in place for years. Shouldn't we be seeing a more significant reduction in imports, especially from China, by now? The data suggests we are still heavily dependent. Maybe the schemes need a review or faster implementation on the ground.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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