FX.co ★ India Trade Deficit Widens in February

India’s merchandise trade deficit widened to $27.10 billion in February 2026, nearly double the $14.42 billion recorded a year earlier, though marginally below market expectations of $28.0 billion. Imports surged 24% year-on-year to $63.71 billion, led by higher purchases of gold and silver, while exports slipped 0.8% to $36.61 billion. In late February, the United States imposed a temporary 10% tariff on Indian goods in addition to standard MFN rates, following a Supreme Court ruling that struck down previously higher tariffs. The expanding deficit also reflects rising freight costs and supply chain disruptions in West Asia. Exporters in sectors such as apparel and manufacturing have begun rescheduling shipments and exploring alternative routes to cope with elevated logistics costs and longer transit times. Although the latest data do not yet fully reflect the impact of escalating geopolitical tensions in the Gulf, higher insurance premiums and continued shipping disruptions are expected to shape trade flows in the coming months.