India's merchandise trade deficit reached a two-month high of $22.99 billion in January, as reported by the commerce ministry. This increase was driven by a decline in exports and a rise in imports. Merchandise exports fell to $36.43 billion from $38.01 billion in December and $37.32 billion a year earlier. Meanwhile, imports rose annually to $59.42 billion, up from $53.88 billion in January 2024, though slightly lower than December's $59.95 billion.
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The deficit in December stood at $21.94 billion, while November recorded a significantly higher gap of $32.8 billion. Cumulative merchandise exports for April 2024 to January 2025 saw a marginal 1.39% increase to $358.91 billion, whereas imports rose by 7.43% to $601.90 billion.
Service sector exports performed better, rising to $38.55 billion in January from $32.66 billion in December, with imports also increasing to $18.22 billion from $17.50 billion. Combined merchandise and services exports totalled $74.98 billion in January, reflecting steady growth from previous months.
India's trade has been affected by weak global demand, geopolitical tensions, and volatile commodity prices. The World Trade Organisation (WTO) forecasts global trade growth at 2.7% in 2024, aligning with expected real GDP expansion.
Key export drivers included electronic and engineering goods, rice, and textiles, while crude oil, petroleum products, electronics, and gold led imports. The US, UAE, and China remained key trade partners.
Commerce secretary Sunil Barthwal highlighted the strong growth in drugs, pharmaceuticals, and gems & jewellery, despite global uncertainties. He stated, 'We have been able to do extremely well in January despite conflicts and tariff variations.'
Source: www.livemint.com