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Despite geo-political headwinds, India’s services sector remained resilient as exports grew 13.4 per cent year-on-year to $37.24 billion while imports fell marginally to $16.66 billion, a report said on Tuesday. 

The report from B2K Analytics said strong performance in the services sector helped offset a widening merchandise trade gap driven by higher energy costs.

India’s overall trade deficit, including merchandise and services, narrowed to $7.8 billion during the month.

Merchandise exports rose 13.8 per cent to $43.56 billion in April, but imports surged 10 per cent to $71.94 billion, leaving a merchandise trade deficit of $28.38 billion compared with $27.10 billion a year earlier.

Merchandise import value jumped largely due to higher crude oil prices and rising energy-related costs amid ongoing geopolitical tensions in West Asia, the report noted.

Closure of the Strait of Hormuz and stalled US-Iran peace negotiations have significantly disrupted global energy supply chains, resulting in higher oil prices and renewed inflationary pressure across major economies.

On the import side, Russia emerged as a key energy supplier as India increased crude purchases amid supply disruptions in the Gulf region, the report noted.

The United States remained India’s largest export destination, while exports to markets such as Singapore, the UAE, Bangladesh, and the Netherlands recorded strong sequential growth as India continued to diversify its trade partnerships.

Overall, India’s exports are concentrated in manufacturing and commodity-linked sectors while imports are driven by energy, electronics, and precious metals.

Rising crude prices, rupee depreciation, and geopolitical instability remain key risks to India’s external sector outlook and broader economic growth in FY27, the report said.

Further, the weakening rupee could enhance India’s potential export competitiveness by making Indian goods cheaper, the firm said.

Despite the ongoing geopolitical tensions, Union Minister of Commerce and Industry, Piyush Goyal, has said that the government is aiming for a $1 trillion export target for FY2027, driven by India’s new trade agreements.