It added that while Rupee depreciation could offer some competitiveness support, the recent hike in bullion import duty might provide the only near-term relief to the overall deficit.
Also Read | India’s April exports jump 13.8%, trade gap widens to 3-month high
India’s goods trade deficit widened to USD 28 billion in April 2026 from USD 21 billion in March, with both oil and gold deficits rising by roughly USD 2 billion each, the brokerage said. The core deficit, excluding oil and gold, deteriorated to USD 13 billion from USD 9 billion, driven by higher shortfalls across chemicals, electronics, ores and agriculture.
“The electronics deficit rose by USD 0.7 billion to an all-time high of USD 7.6 billion,” Nuvama said, highlighting it as the key driver of the broader widening.
Exports showed a rebound on a weak base, with goods exports expanding 14% YoY in April after contracting 7.4% in March. On a trend basis, export growth improved to 1.6% from -2.8%, though Nuvama described the underlying momentum as still subdued.
Also Read | The economy’s next adjustment will come at the pumpNon-oil exports recovered modestly to 1.4% YoY from -1.5% in March, led by a sharp pickup in electronics exports to 13% YoY from 1%. Labour-intensive exports, however, remained in contraction at -9% on a trend basis. “Overall exports improved, but underlying momentum remains weak,” the brokerage wrote.
Imports also strengthened, with goods imports rising 10% YoY after a 6% decline in March. Trend import growth moderated to 9% from 12%, largely due to a sharp slowdown in gold imports to 63% from 138%. Oil imports continued to contract at -15%.
In contrast, core imports excluding oil and gold accelerated to 11% from 7%, powered by a jump in electronics imports to 29% from 18%. Machinery imports, seen as a capex proxy, slowed to 13% from 19% on a trend basis.
Nuvama cautioned that the export outlook remained uncertain amid ongoing supply disruptions and high crude prices. “Any slowdown in global demand poses additional downside risks,” it said.
The brokerage added that Rupee depreciation could provide a partial offset by improving export competitiveness over the near to medium term. It also pointed out that the recent increase in bullion import duty could help contain the gold import bill and offer some relief to the overall trade deficit.
Th brokerage noted that while the headline deficit had widened sharply, the composition reflected stronger domestic demand for electronics alongside weaker external demand for labour-intensive goods.