Indian exports rise in Sep despite US hit, buoyed by shipments to UAE, UK, China

New Delhi: India’s merchandise exports held firm in September, rising 6.7% year-on-year to $36.38 billion, even as shipments to the US fell 11.9%. This was the first month of the US’s tariffs coming into full effect. However, despite the rise in exports, the trade deficit widened to a 13-month high, mainly due to a surge in gold imports.

Merchandise trade deficit widened to $32.15 billion in September from $26.49 billion in the previous month, according to provisional data from the commerce ministry on Wednesday. This was the highest level since August 2024.

The rise in exports during the month was underpinned by strong shipments to the UAE, China, the UK, Germany, and Bangladesh. With the sharp decline in exports to the US, the country’s share in India’s overall exports fell to just 15% in September, versus over 20% earlier this year.

Merchandise exports stood at $35.10 billion in August.

Imports rose to $68.53 billion in September from $61.59 billion a month earlier. A year earlier, in September 2024, merchandise exports had stood at $34.58 billion while imports were at $55.36 billion.

September was the first month expected to fully capture the impact of additional US tariffs on trade and prices. In August, US President Donald Trump announced an additional 25% tariff on Indian goods, reportedly linked to New Delhi’s oil purchases from Russia, bringing total levies on Indian exports to 50%, which kicked in on 27 August.

The tariffs are expected to adversely impact nearly half of India’s exports to the US, particularly from labour-intensive sectors such as garments, leather, gems, and jewellery. Shipments to the US account for roughly 2% of India’s GDP.

Briefing the media on the latest trade data, Union commerce secretary Rajesh Agarwal said Indian exporters had held up well despite global headwinds, reflecting the success of the government’s export strategy.

“Overall, the global export and import of commodities are being impacted [due to US tariffs… But] “despite the headwinds, we have exported more during H1 FY26 (over $400 billion during April-September), compared to the same period of the previous year,” he said.

“During September, imports of gold, silver, fertilisers, and electronics surged. However, cumulative gold imports have remained below last year’s level,” Agarwal added.

Gold imports nearly doubled to $9.6 billion in September from $4.6 billion in August, while import volumes increased to 102 million tonnes from 61 million tonnes, Agarwal added.

Gold prices touched ₹1,22,000 per 10gm in India recently as it smashed past the $4,000 per ounce level globally.

The commerce secretary also said India is open to purchasing more oil and gas from the US, provided the prices remain competitive. “Our team is currently in the US, holding discussions with American counterparts on energy trade and related cooperation.”

Widening deficit, but a solid start

India’s combined trade in goods and services in September stood at $67.20 billion in exports and $83.82 billion in imports, widening the overall trade deficit to $16.61 billion for the month, compared with an $8.60 billion deficit a year earlier.

In August, combined trade in goods and services stood at $69.16 billion in exports and $79.04 billion in imports, raising the overall trade deficit for the month to $9.88 billion.

Services exports remained largely steady at $30.82 billion in September, lower than $34.06 billion in August, while services imports fell to $15.29 billion from $17.45 billion a month earlier.

During April-September, the first six months of the 2025-26 financial year, merchandise exports rose 3.02% year-on-year to $220.12 billion, while imports climbed 4.53% to $375.11 billion.

On the import side, petroleum and crude, electronic goods, and machinery remained the leading categories. China, the UAE, Russia, the US, and Saudi Arabia were India’s top suppliers, while the US, UAE, the Netherlands, China, the UK, and Germany remained the largest export destinations.

Exports on track

Indian exporters are navigating challenges not just from higher US tariffs but also disruptions from other geopolitical uncertainties. The Strait of Hormuz, a vital corridor for Indian energy and container shipments, has seen delays, adding to supply-chain stress in recent months.

The Export-Import Bank of India had projected that India’s merchandise exports would reach $108.1 billion in the July-September fiscal second quarter, indicating that exports are likely to stay on track despite global uncertainties triggered by stiff US tariffs and trade tensions.