India trade deficit narrows as exports surge and gold imports plunge

India’s trade performance showed significant shifts in August 2026. Total exports of merchandise and services rose by 25.41% to approximately $82.68 billion, driven by strong demand in electronics, engineering, and petroleum products. This surge in exports, combined with a 57.7% plunge in gold imports to $2.3 billion, helped narrow the merchandise trade deficit to $26.9 billion.

Despite the narrowing trade gap, the current account deficit (CAD) saw a rise to $7 billion in July compared to $3.2 billion a year prior, largely due to a higher merchandise trade deficit. While merchandise imports rose 14.1% to $70.67 billion due to domestic demand and energy costs, the decline in gold imports is seen as a positive development for foreign exchange reserves.

In the domestic commodities market, gold prices have faced downward pressure due to weak global cues, a strong US dollar, and rising Treasury yields. In major Indian cities, 24-karat gold prices have fluctuated, reaching lows near Rs 1,54,400 per 10 grams in Delhi. Silver prices have also seen volatility, with rates reported around Rs 2,44,900 per kilogram in some metropolitan areas.