India’s Trade Surplus Expands in Asia and Africa Amid Shifting Global Trade Patterns
Stronger export performance in key Asian and African markets offsets narrowing surpluses with some traditional trading partners
According to recent trade data, India’s trade balance underwent a geographical realignment during April-May FY27. Although trade surpluses with established partners such as the US and the Netherlands declined compared with the previous year, balances with several countries in Asia and Africa moved into surplus territory after recording deficits a year earlier.
US Surplus Moderates
Goods imports from the US increased nearly 55 per cent year-on-year to a record high of $5.87 billion in May, while exports remained largely unchanged. As a result, India’s trade surplus with the US moderated to $6.15 billion in the first two months of the current financial year, compared with $7.87 billion during the corresponding period a year ago.
The trade balance with the US stood at $7,874 million in April-May FY26 and $6,148 million in April-May FY27.
Singapore, South Africa Shift Into Surplus
India’s exports to Singapore recorded a significant increase, resulting in a trade surplus of $665 million during April-May FY27. This marked a reversal from a deficit of $1.3 billion in the same period last year.
A similar shift was recorded in South Africa, where the trade balance moved from a deficit of $17 million in April-May FY26 to a surplus of $492 million in April-May FY27.
Tanzania and Sri Lanka Record Sharp Gains
Among India’s neighbouring and African markets, Tanzania and Sri Lanka registered notable improvements.
India’s trade surplus with Tanzania increased from $77 million in April-May FY26 to $1.71 billion in April-May FY27, supported by a 172 per cent rise in exports.
Sri Lanka also showed substantial growth, with exports nearly tripling. India’s trade surplus with the country increased to at least $1.614 billion in April-May FY27 from $404 million a year earlier.
Mixed Trends Across Other Markets
The shift in trade balances was not uniform across all regions.
India’s trade deficit with the United Arab Emirates declined to $4.53 billion from $6.18 billion, although trade activity has yet to fully recover following disruption linked to the West Asia war.
At the same time, India’s trade deficit with China widened significantly, crossing the $20 billion mark over two months.
Europe Shows Varied Performance
Trade performance across Europe remained mixed. While India’s surplus with the Netherlands narrowed, exports to Italy and Spain increased by more than 40 per cent, contributing to wider surplus margins in southern Europe.
Other key trade balances during April-May FY27 included:
- Singapore: $665 million surplus (from -$1,320 million)
- Netherlands: $2,006 million surplus (from $3,076 million)
- UK: $1,040 million surplus (from $780 million)
- Bangladesh: $1,902 million surplus (from $1,488 million)
- Australia: $34 million surplus (from -$310 million)
- Italy: $726 million surplus (from $280 million)
- Nepal: $1,231 million surplus (from $953 million)
- Spain: $839 million surplus (from $448 million)