India’s deficit narrows to $26.49 bn in August, exports to US drop amid Trump tariffs

India’s merchandise trade deficit narrowed to $26.49 billion in August from $27.35 billion in July, as both exports and imports slowed after US President Donald Trump raised tariffs on Indian goods.

Exports fell to $35.1 billion in August from $37.24 billion in July, while imports dropped to $61.59 billion from $64.59 billion in the same period. A Reuters poll of economists had pegged the deficit at $25.13 billion, compared to the July figure of $27.35 billion.

The August data, published on Monday (15 September), was the first since Washington imposed steep duties on Indian exports. A release said Trump’s tariffs are “not at all hurting Indian exports to its largest market.”

The US raised tariffs to 25 per cent on 7 August, before doubling them to 50 per cent on 27 August in response to India’s continued imports of Russian oil — a move critics slammed as hypocritical, since Washington still buys Russian fertilisers and rare earths. “Even President Trump himself extended a warm welcome to Vladimir Putin in Moscow,” the statement added.

Services exports were estimated at $34.06 billion, while imports stood at $17.45 billion, bringing the overall goods and services trade deficit to $9.88 billion.

Shipments to the US — which accounts for about 20 per cent of India’s exports — dropped to $6.86 billion in August from $8.01 billion in July. The additional 25 per cent duty imposed on 27 August pushed total levies on Indian exports to 50 per cent, among the steepest faced by any US trading partner.

The prolonged deadlock in the India-US trade deal continues to weigh on trade flows. The central bank will release detailed services data with a one-month lag, following these initial government estimates.