India is increasingly using disruptions in international trade as an opportunity by widening import supplies and export markets, a report by Elara Securities stated, adding that this helps the country retain external industry resilience despite a declining rupee, rising oil prices and sluggish global demand.
The firm pointed out that although the rupee’s steep decline has increased export competitiveness, rising energy costs have also increased import prices. However, India was able to report a current account surplus in April 2026 due to strong services exports and remittance inflows.
As per RBI’s monthly balance of payments numbers, remittances totaling USD 16 billion and a services trade surplus of USD 18.6 billion helped India achieve a current account surplus of USD 4.7 billion in April 2026.
However, capital outflows—including USD 8.7 billion from foreign portfolio investments (FPI) and USD 3.3 billion from banking—kept the entire balance of payments in deficit at USD 6.6 billion. Meanwhile, net inflows of foreign direct investment increased to USD 7.4 billion.
In May 2026, India’s total exports increased by almost 16 per cent year-over-year (YoY) to about 82 billion, with merchandise exports rising by 18 per cent to a record 45.2 billion.
Furthermore, the merchandise trade imbalance increased to USD 28.2 billion from USD 22.6 billion a year earlier as a result of faster imports, which increased 20.6 per cent YoY to USD 73.4 billion.
Elara calculates that exports were USD 34.2 billion and imports were USD 54.4 billion after accounting for foreign exchange fluctuations, suggesting a reduced trade deficit of USD 20.2 billion.
The report highlighted that India’s increasing success in reducing its reliance on the US market is a notable trend.
While exports to the US increased by just 4 per cent during the same period, exports to countries other than the US increased by 37 percent in May 2026 compared to the pre-tariff period of January 2025.
According to the report, shipments to the US have decreased by 13 per cent since their peak in March 2025, when American importers increased their purchases in anticipation of tariff measures imposed under the so-called “Liberation Day" levies.
Significant changes have also occurred in India’s import sourcing practices, especially in the energy sector, added the report.
In May 2026, imports from key trading partners grew by 63.5 per cent from Russia and 306 per cent from Oman. Additionally, imports from China and the United States increased by 23.4 per cent and 54.4 per cent, respectively.
