Gold imports push trade deficit to 3-month high, FTA duty loss cross Rs 1 trillion
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India’s goods trade deficit widened to a three-month high of $34.68 billion in January 2026. The increase was driven largely by a sharp spike in precious metal imports.
Meanwhile, government estimates suggest that customs duty foregone under free-trade agreements could exceed ₹1 trillion in 2026–27.
Year-on-year imports rose 19.19 percent to $71.23 billion in January, taking the trade gap well above the $23.43 billion recorded in the same month last year, according to a report by The Hindu Businessline.
Exports grew marginally by 0.61 percent to $36.56 billion.
Gold imports surged 349.22 percent to $12.07 billion during the month, while silver imports jumped 127 percent to $2 billion. China remained India’s largest source of imports, with inbound shipments rising 16.67 percent to $12.23 billion.
Commerce Secretary Rajesh Agrawal stated that India’s overall exports of goods and services are expected to reach approximately $860 billion in the current fiscal year, with services exports projected to surpass $410 billion.
In FY25, combined goods and services exports stood at $825.3 billion, marking a 6.1 percent year-on-year increase, even as goods exports remained nearly flat.
Separately, Budget documents reviewed by Business Standard show that customs duty foregone due to preferential tariffs under free-trade agreements is projected to cross Rs 1 trillion in FY27. The largest revenue impact is expected from imports from the Association of Southeast Asian Nations, accounting for Rs 40,833 crore.
India has flagged the need for an urgent review of its trade agreement with Asean, citing faster growth in imports than exports. Although both sides had agreed in August 2023 to complete the review by 2025, the deadline was missed.
Other major contributors to customs revenue foregone include Japan, South Korea, Australia, and the UAE, reflecting the growing fiscal cost of India’s expanding trade pact network.
