India Import-Export Weekly Roundup: February 17, 2026

This week’s trade data reveals a complex landscape for Indian businesses, characterized by a widening merchandise gap and shifting geopolitical trade dynamics. While traditional goods exports face hurdles in major markets, the services sector continues to demonstrate remarkable strength and resilience.

1. Rising Bullion Inflows Drive Trade Imbalance to Quarterly Peak

A massive surge in the procurement of precious metals has pushed India’s monthly trade gap to its widest level since late 2025. For procurement managers, this trend reflects a significant spike in domestic demand and higher global prices, which are currently outweighing the gains made in other export categories.

• Gold imports skyrocketed more than fourfold to reach $12.07 billion within a single month.
• Silver inflows saw a 127% year-on-year increase, totaling $2 billion in January 2026.
• The total merchandise trade deficit expanded to $34.68 billion, up from $23.43 billion the previous year.

2. High US Tariff Barriers Dampen Indian Merchandise Shipments

Indian exporters are feeling the pressure of aggressive trade policies in the United States, which have led to a sharp contraction in outbound shipments. This development highlights the urgent need for SME founders to diversify their export destinations to mitigate the impact of bilateral policy shifts and high customs duties.

• Exports to the US market plummeted by 21.7% in January, dropping to $6.59 billion.
• Recent tariff rates on Indian goods reached as high as 50% before settling at 18%.
• Cumulative exports to the US for the fiscal year have declined by over 21%, totaling $6.6 billion.

3. Record Services Performance Provides Essential Cushion for Trade Balance

The services sector has emerged as a vital lifeline for the Indian economy, hitting record-breaking export figures that help offset the deficit in physical goods. Industry leaders can look to this sector as a consistent growth driver even as global demand for manufactured products remains sluggish.

• Services exports reached a historic high of $43.9 billion in January, a 26.3% increase over the previous year.
• The government projects that annual services exports will exceed $410 billion for the current fiscal year.
• Total combined exports for goods and services have grown by 6.15% between April and January.

4. Traditional Labor-Intensive Sectors Struggle Against Global Headwinds

More than half of India's primary export categories, particularly those involving heavy manual labor, reported a decline in performance this month. This downturn suggests that textile and leather manufacturers must focus on cost efficiencies and value-addition to remain competitive in a cooling global market.

• Sixteen out of thirty major export sectors witnessed a contraction in January 2026.
• Key labor-intensive industries, including apparel and leather goods, were among those reporting decreased volumes.
• Non-petroleum and non-gem exports saw a marginal decline of 0.24%, indicating flat domestic manufacturing demand.

5. High Import Reliance on China Persists Amid Fiscal Targets

Despite ongoing efforts to balance trade, India’s dependence on Chinese imports remains high, crossing a significant milestone for the current fiscal year. Nevertheless, trade officials remain optimistic about hitting an overall export target of $860 billion by leveraging growth in engineering and petroleum products.

• Imports from China reached $108.18 billion during the April-January period of the current fiscal year.
• Engineering goods, petroleum, and iron ore remain the primary drivers for merchandise export growth.
• Key expanding markets for Indian goods now include the UAE, Netherlands, and Italy.

Looking ahead to next week, stakeholders should monitor updates on potential further tariff adjustments in North American markets and new logistics incentives for SME exporters.

Source: Economic Times