India Trade: June deficit widened on higher imports: 2Q current account deficit expected at 1.4% of GDP

Research evidence excerpt

India Trade: June deficit widened on higher imports: 2Q current account deficit expected at 1.4% of GDP

J P M O R G A N Asia Pacific Economic Research

14 July 2026

India Trade: June deficit widened

on higher imports

2Q current account deficit expected at 1.4% of GDP

Emerging Markets Asia, Economic

and Policy Research

Toshi Jain

(91-22) 6157-3387

toshi.jain@jpmorgan.com

JPMorgan Chase Bank, N.A., Mumbai Branch

June's trade deficit came in above expectations at $30.4bn (J.P. Morgan: $25.6bn,

Sajjid Z Chinoy

consensus: $26.5 bn), widening from $28.2bn in May (Figure 1). The surprise was

(91-22) 6157-3386

largely driven by higher oil imports. Due to timing effects, the recent softening in sajjid.z.chinoy@jpmorgan.com

oil prices has not yet fed through: net oil imports were broadly unchanged at JPMorgan Chase Bank, N.A., Mumbai Branch

$14.5bn (vs $14.3bn in May). With oil prices cooling, oil imports should ease in Anusha Mital

coming months. However, the magnitude of the decline may be smaller than the (91-22) 6157-4113

drop in prices suggests, as inventory rebuilding could support higher import anusha.mital@jpmchase.com

volumes. That said, uncertainty around oil prices remains high due to recent events J.P. Morgan India Private Limited

in the Middle East.

Merchandise exports and imports: growth remains strong

In the details

• Non-oil exports rose 2.0% m/m, sa in June, marking a third consecutive

monthly increase. Given the monthly volatility, we focus on the 3-month

moving average of %oya growth, which points to a sharp

improvement: 12.4% in June versus -1.5% in March.

• Manufacturing exports—a better proxy for underlying volume growth—

also strengthened to 13%oya (3mma) in June from -0.9% in March.

• Growth in non-oil exports ex-electronics was broadly similar, suggesting