India's Services Trade Surplus Narrows 10% YoY to USD 16.9 Bn in Sept as Imports Outpace Exports: ICICI Bank

New Delhi, Oct 19 (KNN) India's services trade surplus declined 10 per cent year-on-year (YoY) to USD 16.9 billion in September 2026, as services imports grew faster than exports, according to an ICICI Bank research report.

The decline could put pressure on an important source of foreign exchange earnings that helps offset India's merchandise trade deficit.

Gross services exports fell 0.9 per cent YoY to around USD 36 billion in September, while imports rose 8.9 per cent to approximately USD 19 billion, ANI reported, citing the report.

The divergence indicates that India's spending on overseas services is increasing faster than its earnings from services exports.

Services Surplus Remains Important External Cushion

India's services exports, including information technology, financial, business and professional services, have traditionally helped offset the country's higher imports of merchandise goods.

A narrowing services surplus reduces this cushion, potentially adding pressure to the country's external trade position.

The September decline came even as India's merchandise exports grew 23 per cent year-on-year, highlighting contrasting trends in goods and services trade.

April-September Surplus Still Records Growth

Despite the monthly decline, cumulative net services exports increased 4 per cent YoY to USD 103 billion during April-September 2026.

The average monthly services surplus stood at USD 17.1 billion during the first half of FY27, compared with USD 16.5 billion in the corresponding period a year earlier.

The figures indicate that the services sector continues to provide substantial support to India's external trade position, although sustaining this contribution will depend on export earnings keeping pace with the rising import bill.

The September figures are provisional, with subsequent data expected to provide greater clarity on whether the decline reflects a temporary fluctuation or a broader moderation in services trade.

(KNN Bureau)