India’s exports grow 13% in January, but widening trade deficit and textile decline highlight uneven recovery

India’s overall exports, including merchandise and services, increased by 13.16 per cent year-on-year to USD 80.45 billion in January 2026, reflecting continued expansion in external trade, even as rising imports and sector-specific declines contributed to a widening trade deficit.

According to data released by the Ministry of Commerce and Industry, total imports during the month rose at a faster pace of 18.77 per cent to USD 90.83 billion, compared with USD 76.48 billion in January 2025. As a result, India’s overall trade deficit widened significantly to USD 10.38 billion in January 2026, nearly doubling from USD 5.39 billion in the corresponding period last year.

The increase in exports was driven largely by strong growth in services exports, which rose sharply to USD 43.90 billion from USD 34.75 billion a year earlier. Merchandise exports saw marginal growth, increasing to USD 36.56 billion from USD 36.34 billion in January 2025.

For the April 2025 to January 2026 period, India’s cumulative exports reached USD 720.76 billion, marking a growth of 6.15 per cent compared with USD 679 billion in the same period of the previous financial year. Commerce Secretary Rajesh Agrawal said the country is expected to cross USD 860 billion in total exports during the current financial year, including services exports projected to exceed USD 410 billion.

India had recorded its highest-ever annual exports of USD 824.9 billion in FY2024-25, reflecting continued expansion in global trade engagement.

However, export performance remained uneven across sectors, with textile and apparel exports declining during January due to external trade pressures. According to data released by the Confederation of Indian Textile Industry, combined textile and apparel exports fell by 3.75 per cent to USD 3.27 billion in January 2026, compared with USD 3.40 billion in the same period last year.

The decline was largely attributed to high tariffs imposed by the United States, which affected export competitiveness and reduced shipment volumes. Textile exports declined by 3.68 per cent, while apparel exports fell by 3.84 per cent during the month.

Several key segments recorded declines, including cotton yarn, fabrics, and handloom products, which dropped by 4.15 per cent, while carpet exports fell by 12.05 per cent and jute product exports declined by 18.92 per cent. However, exports of man-made yarn and related products showed resilience, registering marginal growth of 1.01 per cent.

During the April 2025 to January 2026 period, textile exports declined by 2.35 per cent, while apparel exports recorded modest growth of 1.59 per cent. Overall, textile and apparel exports registered a marginal decline of 0.65 per cent during the period.

The sector’s share in India’s total exports also declined to 8.96 per cent in January 2026 from 9.37 per cent a year earlier, reflecting the impact of global demand conditions and trade restrictions.

Meanwhile, India’s total imports during April 2025 to January 2026 rose by 6.54 per cent to USD 823.41 billion, driven by higher merchandise imports and continued domestic demand. Merchandise imports increased by 7.21 per cent to USD 649.86 billion, while services imports grew by 4.10 per cent.

Despite recent weakness in textile exports, industry outlook is expected to improve following the reduction of US tariffs effective February 7, which could enhance export competitiveness and support recovery in shipments.

Overall, India’s export growth in January reflects continued strength in services and steady external demand, while rising imports and sector-specific challenges highlight the uneven nature of trade recovery and evolving global market conditions.