(Commonwealth_India) India’s merchandise trade saw notable shifts in February, with imports and exports experiencing declines, but at different magnitudes. Overall, the country’s imports of goods fell by 16.34% compared to the same month last year, mainly driven by substantial reductions in gold and petroleum imports. This decline in imports led to a significant improvement in India’s trade deficit, which shrank to $14 billion in February, marking the lowest level in 42 months. This drop is a stark contrast to the $19.5 billion trade deficit recorded in January. Despite the fall in imports, India’s merchandise exports also saw a decline, but to a lesser extent, dipping by 11% to $36.91 billion in February.
One of the most dramatic changes was in gold imports, which declined by an impressive 61%, from $6.15 billion in February 2024 to just $2.34 billion in February 2025. The decline in gold imports was a major contributor to the overall reduction in the country’s goods imports. Similarly, the petroleum import bill also saw a significant reduction, falling by 29.5% to $11.9 billion, down from $16.9 billion in the same month the previous year. Silver imports also witnessed a sharp decline, falling from $1.7 billion to just $430 million. Other sectors also saw marked drops in imports, including pearls, precious and semi-precious stones, which fell by 41.61%, and coal, coke, and briquettes, which decreased by 35.63%. Additionally, the import of iron and steel declined by 23.37%.
On the export front, India also saw a decline in several major sectors. Petroleum products, which constitute a significant portion of India’s exports, declined by 29%. Exports of organic and inorganic chemicals fell by 24.5%, and gold and jewelry exports decreased by 20.74%. Despite these declines, India saw some bright spots in its export performance, with goods like tobacco, electronics, mica, and other ores showing notable increases. Tobacco exports surged by 26.76%, electronic goods exports grew by 26.46%, and exports of mica, coal, and other ores rose by 24.25%. Coffee exports also saw a healthy increase of 22.32%, and rice exports grew by 13.21%, helping to offset some of the losses in other sectors.
In terms of the broader picture for the fiscal year, India’s merchandise exports remained relatively flat at $395 billion during the first 11 months of the current financial year, while imports increased by 6%, reaching $667 billion. Despite the challenges, total exports, combining both goods and services, have already crossed the $750 billion mark, just shy of the $778 billion export figure for the entire fiscal year 2024. The Commerce Secretary, Sunil Barthwal, expressed confidence that India would surpass the $800 billion export target for the current financial year, despite the overall challenges posed by the global economic environment. Barthwal attributed the decline in petroleum product imports and exports to the decline in international crude oil prices.
India’s trade with key international partners has also seen positive developments. Exports to the United States, for instance, continue to grow despite concerns over potential reciprocal taxes from the US government. Exports to the US grew by 10.4% in February, reaching $7.9 billion, and rose by 9.1% during the April-February period, totaling $76.4 billion. Similarly, India’s imports from China increased by 10.5% during the same period, amounting to $104 billion.
While India’s overall trade balance improved in February, the nation faces mixed challenges and opportunities across various sectors. The sharp reductions in gold and petroleum imports, alongside the growth in some export sectors, helped to reduce the trade deficit. However, the fall in the exports of key goods like petroleum products and chemicals highlights ongoing difficulties in certain industries. Looking ahead, India remains optimistic about achieving its export target for the fiscal year, bolstered by its diversified trade relationships and the resilience of certain export sectors.
