India's Trade Deficit Reaches Lowest Point in Three Years at $14.05 Billion in February
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Synopsis
India's merchandise trade deficit fell to a three-year low of $14.05 billion in February, down from $22.99 billion in January. Exports remained stable while imports declined, showcasing a positive trend in trade balance.
Key Takeaways
- Trade deficit reduced to $14.05 billion in February.
- Merchandise exports increased by 1.3% to $36.91 billion.
- Imports fell by 16.3% to $50.96 billion.
- Trade deficit for the financial year at $261.05 billion.
- Smartphone exports exceeded $21 billion, marking a 54% increase.
New Delhi, March 17 (NationPress) India's merchandise trade deficit has contracted to a three-year low of $14.05 billion in February, down from $22.99 billion in January, as exports remained stable while imports saw a decline, according to the most recent data published by the Ministry of Commerce and Industry.
In February, the country’s merchandise exports rose by 1.3 percent to $36.91 billion, compared to $36.43 billion in January, while imports decreased by 16.3 percent to $50.96 billion from $59.42 billion the previous month.
“The trade deficit is at its lowest level since August 2021 due to a significant drop in imports, consistent export levels, and a high base effect from the previous February,” stated L Satya Srinivas, Additional Secretary at the Ministry of Commerce and Industry.
For the first 11 months of the financial year, the trade deficit totaled $261.05 billion. Merchandise exports remained flat, while imports increased by 5.7 percent compared to the same timeframe last year.
In the services domain, exports were noted at $35.03 billion, marking a 9.1 percent drop from January, while imports similarly decreased to $16.55 billion. Gold imports for the current financial year reached $53.53 billion, while oil imports totaled $166.73 billion. Non-oil exports stood at $337.01 billion.
The primary contributors to the growth in merchandise exports were electronic goods, engineering products, pharmaceuticals, rice, and gems & jewelry.
India’s smartphone exports surged past Rs 1.75 lakh crore ($21 billion) in the first 11 months of 2024-25 (April-February), reflecting a 54 percent increase over the same period in 2023-24, as reported by the India Cellular & Electronics Association.
Ashwini Vaishnaw, Minister for Electronics and Information Technology, projected smartphone exports to hit $20 billion (Rs 1.68 lakh crore) during 2024-25, a target already surpassed in the first 11 months of the current financial year.
India’s electronics exports, particularly smartphones, have gained momentum in recent years due to the government’s Production Linked Incentive (PLI) Scheme, which has attracted global tech giants, including Apple and its suppliers, seeking to establish alternative supply chains away from China following U.S. sanctions.
The PLI initiative by the government has enhanced exports and curtailed imports, with domestic production now fulfilling 99 percent of local demand.
