Goods exports surged 20% in July 2026 on West Asia recovery and further diversification

India’s merchandise exports saw a growth of nearly 20% in July 2026, faster than that of imports, despite the ongoing turmoil in West Asia, official data released on Thursday shows. 

Notably, exports to West Asia itself have recovered as well, with July’s exports to the region nearly 9% higher than in July last year. According to Commerce Secretary Rajesh Agrawal, this has been achieved by routing India’s trade through different ports and shipping lines. 

However, India’s trade deficit still widened in July 2026 to $15 billion as services imports grew faster than services exports. 

Goods exports shine

India’s merchandise exports stood at $44.2 billion in July 2026, up 19.6% over its level in July last year. According to Mr. Agrawal, this was achieved through continued diversification of export destinations. 

“If you look at destination countries, we are now doing well in countries where we typically did not earlier, such as China, Singapore, Japan, South Korea, Taiwan, Vietnam, Austria, Malaysia, and several other countries,” Mr. Agrawal said while speaking at a press conference.

India’s exports to China grew 65% in July 2026 to $2.2 billion, albeit on a low base. Over the course of April-July 2026, exports to China grew 36%. 

“Even in Africa, in Kenya and the South African Customs Union region, there has been an increase in exports in the first four months of this financial year,” he added. “Tanzania has also been a very strong silver lining where 130% growth in exports has been seen.”

Merchandise imports grew a relatively slower 17.5% in July 2026 to $76.2 billion. 

 West Asia recovers

The ongoing war in West Asia hit India’s exports to the region in March and April, with exports contracting nearly 57% in March and 27% in April. Since then, however, exports to the region have recovered, and stood at $5.7 billion in July 2026, up 8.8% over July last year.

“Some new ports have become more operational and they have started handling more cargo,” Mr. Agrawal explained. “Some of the ports in Oman that are outside the Strait of Hormuz have been doing well and more cargo has been flowing through them. Even two ports in the UAE — Fujairah and Khor Fakkan — are seeing more traffic.” 

Normally, he said, it was the Jebel Ali port in Dubai that had been handling the bulk of the cargo. 

“Since that is not being able to handle it currently, other ports are stepping up and infrastructure has been upgraded on that side,” Mr. Agrawal added. “More shipments are going through those routes. So, that has helped us recover our exports to the region.”

Tepid services  

The data shows that services exports grew 6.4% in July 2026 to $35.9 billion. This is in keeping with the subdued export order growth sentiments expressed by service exporters surveyed in the HSBC India Services PMI report for the month.

Services imports grew faster than exports, at 9.5%, to $18.9 billion. 

The combined trade deficit including both merchandise and services widened to $15 billion in July 2026 from $11.4 billion in July last year.