New Delhi, Aug. 14 -- India's merchandise exports surged 19.63% year-on-year to a record $44.24 billion in July, even as imports rose 17.52% to $76.22 billion, widening the merchandise trade deficit to a six-month high of $31.98 billion, according to government data released on Thursday. July exports were the highest ever for the month, rising from $36.98 billion a year earlier. Commerce secretary Rajesh Agrawal attributed the increase to higher shipments of petroleum products, electronics, engineering goods and marine products. Exports to West Asian countries, which had plunged in March amid the war, recovered to normal levels by June and grew 8.62% year-on-year to $5.7 billion in July, Agrawal said. Despite the stronger growth in exports than imports, the merchandise trade deficit widened from $27.88 billion in July 2025 to $31.98 billion this year. Imports of several high-value categories rose sharply in July, led by crude oil at $18.31 billion, electronic goods at $14.36 billion, electrical and non-electrical machinery at $6.08 billion, coal, coke and briquettes at $3.05 billion and fertilisers at $2.47 billion. China remained India's largest source of imports, with shipments rising 34.42% to $14.67 billion from $10.91 billion a year earlier. Russia was the second-largest source, with imports nearly doubling to $8.90 billion from $4.84 billion, driven mainly by energy shipments. The US was the third-largest source of imports at $5.5 billion, up 18.11% from $4.63 billion, reflecting higher imports of oil and gas. Cumulatively, merchandise exports in the first four months of 2026-27 rose 17.04% to $173.78 billion, while imports increased 19.27% to $292.38 billion. The merchandise trade deficit widened to $118.60 billion from $96.66 billion in the April-July period of 2025-26. Services exports grew at a slower pace. Estimated services exports rose 6.4% to $35.89 billion in July from $33.74 billion a year earlier, while services imports increased 9.5% to $18.94 billion from $17.30 billion. The July services figures are estimates, as the Reserve Bank of India releases services trade data with a lag. The sharp rise in merchandise exports comes despite persistent global uncertainties, shipping and logistics disruptions and elevated freight costs, said SC Ralhan, president of the Federation of Indian Export Organisations. However, he cautioned that the rising import bill and widening trade deficit required attention. "While imports of energy, capital goods and intermediates are also associated with higher domestic economic activity, we need to simultaneously strengthen domestic manufacturing capabilities in critical inputs, electronics, machinery and other areas of high import dependence," Ralhan said. "Export expansion and strategic import substitution should complement each other in strengthening India's external sector," he added....