According to the Reserve Bank of India’s January 2026 bulletin, India’s trade deficit widened further in January as import rates grew faster than exports. Especially there was a huge surge in the import of gold and silver, which put pressure on the trade balance.
It has been said in the report that India’s exports to China have doubled, which means the demand for Indian goods in the Chinese market was good. At the same time, the consignment of goods sent to America has reduced, due to which there is disparity in exports. Because of this, the goods trade deficit is looking bigger.
strength in domestic economy
RBI has also written in the bulletin that despite external challenges, domestic activities remain strong. Indicators like energy consumption, digital payments, trade and logistics are showing good momentum in January, reflecting domestic demand and business activity.
The trend of industrial production is also positive and the growth in the service sector continues. Quarterly results of listed private companies indicate that overall sales have picked up, boosting domestic demand.
Foreign investment and currency reforms
According to the bulletin, confidence in the market has increased due to the return of foreign portfolio investment, due to which the Indian rupee has also strengthened. Behind this, there are positive signals related to the free trade agreement of EU and America with India, which has increased the confidence of investors.
global economic conditions
Globally, economic activity also looks sustainable, although geopolitical tensions are increasing. While high-frequency indicators have shown some improvement, risks remain. The World Bank’s Commodity Price Index has touched a 10-month high due to rising metal and energy prices, which may impact input costs and trade dynamics. RBI’s assessment shows that domestic growth is strong, but the widening trade deficit reflects external pressures, which need management.