India’s total trade deficit, counting both merchandise and services, widened in April 2025, compared to April last year, according to the latest data from the Ministry of Commerce and Industry.
Overall Trade
- India’s total trade deficit (merchandise plus services) stood at 8.65 billion US dollars.
- In April 2024, the trade deficit was 5.77 billion US dollars, indicating a significant widening.
- Total exports (including both merchandise and services) for the financial year 2024–25 reached 824.9 billion US dollars.
- This is the highest-ever annual export figure, showing a growth of 6 percent over the financial year 2023–24.
Merchandise Trade
- Merchandise exports were 38.49 billion US dollars, reflecting a growth of 9 percent compared to April 2024.
- Merchandise imports rose to 64.91 billion US dollars, a year-on-year increase of 19.1 percent.
- The merchandise trade deficit widened to 26.4 billion US dollars in April 2025, up from 19.19 billion US dollars in April 2024.
Services Trade
- Services exports were estimated at 35.31 billion US dollars, an increase of 17 percent over April 2024.
- Services imports stood at 17.54 billion US dollars, showing a growth of 4.6 percent.
- The services trade surplus was 17.77 billion US dollars.
Merchandise Imports
- Petroleum imports jumped 25.6 percent to 20.7 billion dollars, driven by front-loading due to softer global crude prices.
- Chemical material imports more than doubled to 2 billion dollars.
- Electronics imports increased 31 percent to 9.5 billion dollars due to growing domestic demand.
- Gold imports rose 4.9 percent to 3.1 billion dollars.
- Imports of metalliferous ores and minerals rose 77 percent, and non-ferrous metal imports rose 30 percent.
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Reasons for Widening of India’s Trade Deficit
- Surge in Merchandise Imports: Imports rose 19 percent year-on-year, from 54.49 billion dollars in April 2024 to 64.91 billion dollars in April 2025.
- Front-Loading of Shipments and Imports: Anticipation of reciprocal tariffs by the United States (effective April 9, later paused for 90 days) led to advance shipments, both from and to India.
- Importers and exporters front-loaded transactions to avoid potential tariff burdens, causing a spike in April trade figures.
- Electronics and Energy Demand: A significant portion of electronics exports and imports moved via air cargo, and domestic demand for electronics surged.
- Crude oil and petroleum-related imports increased due to seasonal demand and inventory building amid price volatility.
- Export Growth Was Not Sufficient to Offset Import Surge: Although merchandise exports grew by 9.1 percent to 38.49 billion dollars, the import growth of 19 percent created a larger trade gap.
- Services exports did show strong performance (17 percent increase to 35.31 billion dollars), but the goods trade deficit remained the dominant factor.
- Rising Global Costs: Global transportation and insurance costs have risen, increasing the landed cost of imports.
- This put additional pressure on India’s trade balance.
- Geopolitical Tensions and Trade Disruptions: India-Pakistan tensions and disruptions in regional trade channels added to uncertainty.
- Although not the primary reason, such tensions can affect border trade and investor sentiment, indirectly influencing trade flows.
- China and Russia as Major Suppliers: Imports from China rose 27 percent to 9.9 billion dollars, and from Russia by 18 percent to 6.2 billion dollars.
- UAE imports surged by 89 percent, nearly equalling Russian shipments.
- India remains heavily dependent on select countries for energy, electronics, and raw materials.
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