How Did India’s Trade Deficit Narrow to $18.78 Billion in June?
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Synopsis
In June, India's trade deficit saw a significant contraction to $18.78 billion as exports remained steady while imports decreased. The government actively engages with exporters to tackle challenges, especially amidst ongoing trade negotiations with the US. The latest data reflects resilience in India's trade performance despite global uncertainties.
Key Takeaways
- Trade deficit narrowed to $18.78 billion in June.
- Exports remained flat at $35.14 billion.
- Imports decreased by 3.71% to $53.92 billion.
- Surplus in services trade was $15.62 billion.
- Continued government support for exporters amidst global challenges.
New Delhi, July 15 (NationPress) India's trade deficit for June this year has contracted to $18.78 billion, a decrease from $21.88 billion in May, as per the latest data provided by the Commerce and Industry Ministry on Tuesday.
In June, India's export growth remained stagnant at $35.14 billion, nearly identical to $35.16 billion during the same month last year. Conversely, the country's imports fell by 3.71%, totaling $53.92 billion in June compared to $56 billion a year earlier.
Additionally, the trade in services reported an estimated surplus of $15.62 billion in June, with service exports at $32.84 billion and imports at $17.58 billion.
The combined exports of merchandise goods and services amounted to $67.98 billion, while the total imports reached $71.50 billion, resulting in a net trade deficit of $3.51 billion for the month.
Commerce Secretary Sunil Barthwal informed the media last month that global conflicts and uncertainties are affecting Indian exports, while the government is actively engaging with exporters to address their shipping and insurance concerns.
This trade data emerges amidst ongoing discussions with the US and other international partners.
The US aims for broader market access for its agricultural and dairy products, a significant challenge for India as it concerns the livelihoods of many small farmers and is therefore a sensitive issue.
India is attempting to obtain an exemption from US President Donald Trump's 26% tariffs by reaching an interim agreement before July 9, while also advocating for substantial tariff concessions on its labor-intensive exports such as textiles, leather, and footwear.
Meanwhile, Trump has announced that the US administration will begin sending letters to trading partners regarding their tariff rates as early as Friday, even as negotiations with various nations, including India, have entered the final stages.
India's trade performance during Q3 FY25 (October–December 2024) displayed cautious resilience amid geopolitical volatility and changing global demands, according to a quarterly report from NITI Aayog released on Monday.
Merchandise exports saw a year-on-year increase of 3%, reaching $108.7 billion. The export composition remained stable, with aircraft, spacecraft, and parts entering the top ten exports, surging over 200% year-on-year due to heightened demand from Saudi Arabia, the UAE, and the Czech Republic, the report states.
High-tech merchandise exports have gained traction since 2014, driven primarily by electrical machinery and arms/ammunition, with a robust 10.6% compound annual growth rate.
Point of View
It's imperative to highlight that India's trade landscape reflects a cautious yet resilient approach amid global challenges. The narrowing trade deficit is a positive indicator, but the ongoing negotiations with the US present both opportunities and hurdles. As the nation moves forward, addressing the concerns of exporters while ensuring the livelihoods of small farmers remains a priority.
NationPress
16/07/2025
Frequently Asked Questions
What was India's trade deficit in June?
India's trade deficit for June was $18.78 billion, down from $21.88 billion in May.
How did exports perform in June?
India's exports remained steady at $35.14 billion in June, compared to $35.16 billion in the same month last year.
What challenges are impacting Indian exports?
Global conflicts and uncertainties are affecting Indian exports, prompting government action to support exporters.
What is the estimated surplus from trade in services?
The trade in services reported an estimated surplus of $15.62 billion in June.
What are the current US-India trade negotiations about?
The negotiations focus on broader market access for US agricultural products and Indian tariff exemptions.
