Saturday, 28 Feb, 2026
Overall, the data shows that while India’s export sector is expanding, especially in services, the faster rise in imports is putting pressure on the trade balance. Image Source: IANS
According to data released by the Commerce Ministry, imports rose by 18.76 percent to 90.83 billion dollars in January 2026, up from 76.48 billion dollars in January 2025.
India’s combined exports of goods and services recorded a strong year-on-year growth of 13.17 percent in January 2026, reaching a total value of 80.45 billion dollars, compared to 71.09 billion dollars in the same month last year. This growth reflects an improvement in external demand and a steady performance across key export sectors.
At the same time, India’s overall imports increased at an even faster rate. According to data released by the Commerce Ministry, imports rose by 18.76 percent to 90.83 billion dollars in January 2026, up from 76.48 billion dollars in January 2025. The higher growth in imports suggests increased domestic consumption, rising industrial activity, and greater demand for raw materials, energy, and capital goods.
As a result of imports growing faster than exports, the country’s combined trade deficit in goods and services widened significantly. In January 2026, the trade gap expanded to 10.38 billion dollars, almost double the 5.39 billion dollars recorded in the same period last year. This widening deficit highlights the growing imbalance between export earnings and import spending during the month.
Trade during January
Source: Ministry of Commerce and Industry
Both major components of trade showed positive movement. Merchandise exports saw a modest rise, increasing from 36.34 billion dollars in January 2025 to 36.56 billion dollars in January 2026. Although the growth in goods exports was limited, it still indicates stability in sectors such as manufacturing, agriculture, and minerals.
In contrast, services exports registered a much stronger performance. They increased sharply from 34.75 billion dollars last year to 43.90 billion dollars in January 2026. This substantial rise reflects the continued strength of India’s services sector, particularly in areas such as information technology, business services, consulting, and digital services, which remain key drivers of foreign exchange earnings.
Overall, the data shows that while India’s export sector is expanding, especially in services, the faster rise in imports is putting pressure on the trade balance. Going forward, sustaining export growth while managing import dependence will be important for maintaining external economic stability and strengthening India’s position in global trade.
Talking about the service sector, it has firmly established itself as the backbone of the country’s economic growth, stability, and long-term structural change. At a time when the global economy is facing uncertainty and industrial activity remains weak in many regions, the services sector has played a crucial role in supporting India’s economic momentum. It now contributes more than half of the country’s Gross Value Added (GVA) and continues to be a key source of export earnings and employment generation.
Total Service Trade
Source: Ministry of Commerce and Industry
Globally, India has strengthened its position as a major player in services trade. The country is currently the seventh-largest exporter of services in the world, and its share in global services exports has risen significantly over the years. From just 2 percent in 2005, India’s share increased to 4.3 percent by 2024, reflecting the growing competitiveness and global demand for Indian services. According to the Economic Survey 2025–26, presented in Parliament by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman, the services sector has consistently recorded annual growth of around 7 to 8 percent. It has functioned as a high-growth and low-volatility pillar of the economy, standing in contrast to the sharper ups and downs seen in agriculture and industrial sectors.
During the financial year 2025–26, the services sector experienced broad-based expansion across almost all major segments. Growth in services reached 9.1 percent, making it the primary contributor to overall GVA growth, as reflected in the First Advance Estimates for FY26. Most major sub-sectors, including information technology, financial services, trade, transport, tourism, healthcare, and professional services, registered growth ranging between 8 percent and 9.9 percent. This widespread performance indicates a healthy and diversified services ecosystem.
The rising importance of services is also evident in India’s export profile. Between FY23 and FY25, services exports accounted for an average of 9.7 percent of GDP, compared to 7.4 percent in the period before the pandemic. This increase highlights the sector’s expanding role in supporting external trade and foreign exchange earnings. At a time when global merchandise trade has been affected by policy uncertainties, supply chain disruptions, and geopolitical tensions, services exports have acted as a vital cushion for the economy.
Overall, India’s services sector has emerged as a key stabilising force in an uncertain global environment. Its strong growth, resilience to external shocks, and increasing contribution to exports and employment have made it central to the country’s development strategy. Going forward, continued investment in skills, digital infrastructure, and innovation will be essential to sustain this momentum and further strengthen India’s position in the global services market.
