India's trade deficit jumps 24.8% YoY to $23B in January
What's the story
India's trade deficit has surged to $22.99 billion in January 2025, a sharp increase of 24.85% from the year-ago period. Last year, the deficit for the same month stood at $16.56 billion. The spike is mainly attributed to a decline in exports and a sharp increase in imports during the period, according to official data released today by the Ministry of Commerce and Industry (MoCI).
Deficit growth
Cumulative trade deficit rises to $87.47B
The cumulative trade deficit between April 2024 and January 2025 has also witnessed a sharp increase, touching $87.47 billion. This is up from the $70.06 billion recorded during the same period of the last fiscal year. The data shows a trend of widening trade deficits over the past few months, despite attempts to ramp up exports and rein in imports.
Trade dynamics
Exports decrease while imports surge
India's exports have dipped slightly to $36.43 billion in January 2025 from $37.32 billion in the same month last year. Meanwhile, imports surged to $59.42 billion from $37.32 billion during the same period last year. The imbalance between the exports and imports has significantly contributed to the widening trade deficit.
Export performance
YoY growth in exports on cumulative basis
Despite the overall decline in January, India's exports have recorded a 7.21% year-on-year growth on a cumulative basis. This means an additional $46 billion from April 2024 to January 2025. Non-petroleum exports also witnessed a sharp 14.47% rise during this period, propelled by a sharp jump in the export of electronic goods and pharmaceuticals and resilience in the gems and jewelry sector.
Policy
Government's focus on exports in Union Budget
In the latest Union Budget, the government emphasized on exports as one of the four key engines of growth. The newly launched Export Promotion Mission will focus on boosting exports through various schemes for new exporters, the untapped markets, and innovative products. It will also address non-tariff barriers faced by MSMEs and integrate Bharat Trade Net for smoother export processes.