NEW DELHI: India’s trade deficit has narrowed to a 42-month low of $14 billion in Feb 2025, thanks primarily to imports slowing to $51 billion, data released by the commerce ministry showed on Monday. But volatility in petroleum prices and global uncertainties meant that exports last month fell to $36.9 billion, compared to $41.4 billion in the same month last year. In the 11 months of FY25, merchandise and services exports rose 6.2% to $750.5 billion compared to $706.4 billion in the year-ago period.
Union commerce secretary Sunil Barthwal said, “This has been a difficult year in terms of trade. Still, we are on the right track of meeting our target of crossing $800 billion in trade, which was $778 billion last fiscal. Non petroleum products are the key strength of Indian trade and that is growing at over 6%. Except gems and jewellery, all key sectors are growing well. Our focus is on increasing services sector, which has grown at 14%. Overall exports are doing well.”
ICRA chief economist Aditi Nayar said, “Merchandise trade deficit compressed to $14.1 billion in Feb 2025 from $19.5 billion in Feb 2024, largely explained by a compression in imports of oil, gold and silver. A portion of the year-on-year decline in merchandise exports can be attributed to the base year effect related to the leap month. The trade deficit was also significantly lower than the average of over $23 billion during the first 10 months of FY25. We expect current account to witness a surplus of $5 billion in Q4 FY25 in the ongoing quarter.”