India's Evolving Trade Dynamics with G7: A Shift Towards Export Dependency

India is increasingly reliant on the G7 for exports while diversifying imports. A Rubix report notes India's trade with G7 grew by 6.1% in FY2026. Despite a reduced trade surplus, G7 nations play a crucial role in India's economic landscape, fueled by key exports like smartphones.

India is experiencing a shift in its trade dynamics, growing more dependent on advanced G7 markets for exports whilst diversifying its import sources. A recent report by Rubix highlights this trend, showcasing a 6.1% year-on-year increase in merchandise trade with G7 countries, reaching USD 263 billion in the fiscal year 2026.

While this growth is noteworthy, it comes with a notable decline in the country's trade surplus with the G7, which fell from USD 28 billion in FY2025 to USD 13 billion in FY2026. This change is primarily due to a 14% increase in imports, despite exports remaining static at USD 138 billion. Nevertheless, India maintains a trade surplus with four G7 nations — the US, Canada, Italy, and the UK.

The report also notes an increasing share of G7 nations in India's total goods exports, rising from 29% in FY2021 to 31% in FY2026. Simultaneously, the G7's share in Indian imports has declined from 18% to 16%. India is advancing its economic relationships with G7 through FTAs with the UK and EU, and engaging in bilateral talks with the US, solidifying its place as a high-value manufacturing hub, especially in the smartphone sector.