India’s trade deficit saw a sharp reduction in February, narrowing to $14.05 billion from $22.9 billion in January. This decline was mainly due to a drop in imports, as the government continues its efforts to boost exports amid global trade challenges.
The country’s merchandise exports in February stood at $36.91 billion, slightly higher than $36.43 billion in January. However, imports saw a steep fall to $50.96 billion from $59.42 billion in the previous month, leading to an improved trade balance. Petroleum imports were reported at $11.8 billion, while gold imports stood at $2.3 billion.
On the services trade front, exports fell to $35.03 billion from $38.55 billion in January, while imports declined to $16.55 billion from $18.22 billion.
Non-petroleum product exports grew 6.43% in April 2024-February 2025, while overall merchandise exports saw a marginal 0.06% year-on-year growth, with imports expanding 5.71%. As a result, the trade deficit during the period is 16.86% bigger than last year’s.
Despite these challenges, the Commerce Ministry is optimistic about surpassing $800 billion in total exports for the year, compared to $778 billion last year. Although the gems and jewellery sector took a beating, coffee exports saw robust growth, while non-petroleum trade continued to grow at 6%.
Meanwhile, India is also engaged in multilateral trade talks. The 10th round of India-EU Free Trade Agreement negotiations were recently concluded in Brussels, and talks with the US focused on increasing bilateral trade to $500 billion by 2030.
Concerns over the US tariff policies still remain as Washington is also considering imposing reciprocal tariffs on various countries, including India. The Commerce Minister Piyush Goyal has held meetings with the US officials for evaluating the fallout of the proposed tariffs and conferring on the trade opportunities.
Apart from this, the government of India is considering imposing a safeguard duty on steel imports to protect domestic producers from external pressures. As the uncertainties in international trade persist, India is taking steps to protect its economic interests through bilateral and multilateral engagements.
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Source: CNBCTV.
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