New Delhi, September 16, 2026 (Yes Punjab News)
Electronics is emerging as India’s “new oil” as the country’s electronics trade deficit approaches $40 billion since April, while the overall goods trade deficit narrowed in August, according to a report by HSBC Global Investment Research.
The report said the electronics trade deficit stood at around $8 billion in August and nearly $40 billion since April, bringing it close to India’s overall oil trade deficit in value terms.
India’s overall goods trade deficit narrowed to $27 billion in August from $32 billion in July, primarily due to a lower import bill, while export earnings remained unchanged in dollar terms.
On a seasonally adjusted basis, the deficit narrowed further to $23 billion in August, compared with $31 billion in the previous month.
The report said export performance improved across major categories, with non-oil exports recording sequential growth for the fifth consecutive month. Electronics and engineering shipments registered particularly strong gains.
Shipments to Singapore, Malaysia, Hong Kong, South Africa and Mainland China have also remained strong since the beginning of 2026, according to the report.
HSBC said the increase in exports to these markets could partly reflect improved price competitiveness following a sharp depreciation of the Indian rupee. The rupee has weakened by around 12 per cent against the US dollar, 21 per cent against the British pound and 25 per cent against the euro, the report noted.
India continues to export around 40 per cent of the oil it imports, which helps reduce its net oil trade deficit. The gold trade deficit also narrowed in August, although HSBC cautioned that the improvement may not persist as the festive season begins.
Despite the improvement in exports, the report said export growth was not yet strong enough to sustainably bring down the overall trade deficit. It identified a “missing middle” in India’s export basket, pointing to weakness in labour-intensive, mid-tech exports.
According to the report, mid-tech exports have remained consistently weak despite the improved competitiveness resulting from the rupee’s depreciation. These exports also face higher tariffs in destination markets compared with those faced by some of India’s peers.
HSBC said this segment could represent a significant opportunity for India. The country has accelerated the signing of trade agreements with several countries and regions, and once implemented, lower tariff rates could improve the competitiveness of Indian mid-tech exports.
Meanwhile, India’s services trade surplus for August is estimated at around $17 billion, slightly below the final surplus of $18 billion recorded in July.
The August services trade figures are provisional estimates from the Ministry of Commerce and Industry.
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