India’s trade deficit widened significantly to $21.54 billion in March, compared to $15.34 billion in March 2024, as exports grew at a marginal 0.7 per cent to $41.97 billion while rise in imports was steeper at 11.4 per cent to $63.51 billion.

Persistent global uncertainties due to geo-political tensions, on-going wars and the unpredictability of US President Donald Trump’s tariff moves contributed to goods exports in fiscal 2024-25 remaining almost flat at $437.42 billion compared to $437.07 billion in 2023-24.

Imports in 2024-25 increased 6.2 per cent to $720.24 billion. Trade deficit in FY25 increased to $282.82 billion compared to $241.14 billion in the previous fiscal.

Global uncertainties

The past fiscal was a difficult one for trade due to intense geopolitical tensions, slowdown and recession in key economies and impact on sea routes, Commerce Secretary Sunil Barthwal said on Tuesday at a press interaction on trade data for FY25 and March 2025.

“India, however, has done better than most other countries. In fact, non-petroleum exports during the fiscal are the highest ever,” he said.

According to some analysts, exports in March 2025 fared better than expected as exporters were in a hurry to send shipments before Trump’s reciprocal tariffs were imposed in April.

“The merchandise export data belied expectations of a front loading of shipments ahead of the proposed tariffs, contributing to a higher-than-expected deficit figure. We now anticipate a current account surplus of $1-3 billion in Q4 FY2025, with a full year deficit of around 0.9 per cent of GDP,” according to Aditi Nayar, chief economist, ICRA.

Going forward, the situation is uncertain as traders are not certain how things will unfold in the US. “Exporters are worried about importers still holding back orders because of the uncertain situation. While the 10 per cent baseline duty that the US has imposed on most trade partners can be shared between the exporters, importers and consumers, players are in the wait and watch mode as the Trump government is continuing to pull surprises,” an official told businessline.

The country’s overall exports of goods and services are estimated to reach a record of $ 820.93 billion in 2024-25, an increase of 5.5 per cent over 2023-24. The final numbers will be known later when RBI shares official estimates of services exports.

Top destination

The US continued to be India’s largest export destination in FY 25 with exports at $86.51 billion. The UAE, with which India has implemented an FTA, was the second largest export market with exports worth $36.64 billion during the fiscal. The UK, China, Singapore, Saudi Arab, Bangladesh, Germany and Australia were amongst the top ten export destinations.

China was India’s top import source with the country sending shipments worth $113.46 billion during fiscal 2024-25. Russia was next in line with imports from the country at $63.84 billion followed by UAE at $63.42 billion and the US at $45.33 billion.

Key growth drivers

In FY25, major drivers of growth in goods exports included engineering, electronics, pharma, ready-made garments of all textiles, rice, cotton yarn/fabrics, plastics, coffee, spices, tea and tobacco.

Items which posted a fall in exports during the fiscal included petroleum products, gems & jewellery and organic and in-organic chemicals.

Gold imports increased to $58.01 billion in FY25 compared to $ 45.54 billion in the previous fiscal. In volume terms, however, gold imports declined to 757.15 tonnes in 2024-25 against 795.32 tonnes in 2023-24.

Other import sectors that posted an increase last fiscal include crude oil, electronic goods, machinery, transport equipment, chemicals and non-ferrous metals. Imports of coal and coke declined during the fiscal.

Published on April 15, 2025