India’s merchandise trade deficit slumped to $14.05 billion in February, the lowest level since August 2021, as imports of petroleum crude and gold fell sharply, and the uncertainty over tariffs hampered global trade.
Exports were down 10.8% to $36.9 billion in February, registering fourth straight month of contraction. Imports plunged by a sharper 16.3% to $ 50.96 billion, the lowest level since April 2023.
Fall in global commodity prices also impacted the trade numbers. Crude oil imports fell 29.6% to $ 11,9 billion while the gold imports were down 62% to $ 2.3 billion.
The decline in prices of crude weighed on exports too. Petroleum products exports during the month were down 29.2% to $ 5.8 billion. In value terms this decline was $ 2.4 billion.
Another drag on exports were chemicals which were down 24.5% to $ 2.2 billion and gems and jewellery where shipments contracted 20.7% to $ 2.5 billion.
Imports of coal were down 35% and iron and steel 23%. The decline in imports of key industrial inputs is also down to lower international prices while some of the slowdown could also be due to softening of global and local demands.
Even the engineering sector that has been performing well during the year fell 78.6% to $ 9 billion. According to the President of Federation of Indian Export Organisations (FIEO) Ashwani Kumar exports have faced challenges due to global tariff warPetroleum has been a drag on Indian exports in the whole of 2024-25. “Non petroleum exports in April-February stood at $ 337 billion as against $ 316 billion in the same period of the previous year,” additional secretary in the department of commerce L Satya Srinivas said.
With petroleum the exports growth in April-February exports were up just 0.06% to $ 395.63 billion. Imports during the first eleven months of this fiscal were up 5.71% to $ 656.68 billion.
“It has been a very difficult year but looking at the progress the overall exports this year will be more than $ 800 billion,” commerce secretary Sunil Barthwal said.
Services exports in February were up 23% to $ 35 billion while imports were up 8.6% to $ 16.5 billion. Overall exports in February were up 3.1% to $ 71.95 billion while imports were down 11% to $ 67.52 billion.
Services exports in April-February of this financial year were up 14% on year to $ 354.9 billion while imports were 13.3 % to $ 183.2 billion. Overall exports (merchandise and services) in April-February were up 6.2% to $ 750.5 billion while imports were up 7.2% to $ 839.9 billion.