India's Trade Deficit Narrows in June Amid Global Challenges
Trade Deficit Update
New Delhi, July 15: India's trade deficit for June 2023 decreased to $18.78 billion, down from $21.88 billion in May, as reported by the Commerce and Industry Ministry on Tuesday.
Exports remained nearly unchanged at $35.14 billion in June, compared to $35.16 billion during the same month last year. In contrast, imports fell by 3.71% to $53.92 billion in June, down from $56 billion a year earlier.
Additionally, the services sector recorded a surplus of approximately $15.62 billion in June, with service exports totaling $32.84 billion and imports at $17.58 billion.
The combined total of merchandise goods and services exports reached $67.98 billion, while imports amounted to $71.50 billion, resulting in a net trade deficit of $3.51 billion for the month.
Commerce Secretary Sunil Barthwal mentioned last month that global conflicts and uncertainties are affecting Indian exports, but the government is actively engaging with exporters to resolve issues related to shipping and insurance.
This trade data emerges during ongoing discussions with the US and other international partners.
The US is advocating for greater market access for its agricultural and dairy products, which poses a significant challenge for India, as it impacts the livelihoods of small farmers and is viewed as a sensitive issue.
India is also aiming to secure an exemption from the 26% tariffs imposed by US President Donald Trump by finalizing an interim agreement before July 9, while seeking substantial tariff reductions for labor-intensive exports like textiles, leather, and footwear.
Trump has indicated that the US administration will begin notifying trading partners of their tariff rates as early as Friday, even as negotiations with various countries, including India, to prevent increased US tariffs are nearing completion.
According to a quarterly report released by NITI Aayog, India's trade performance in Q3 FY25 (October–December 2024) demonstrated cautious resilience amid geopolitical instability and changing global demand.
Merchandise exports saw a year-on-year increase of 3%, reaching $108.7 billion. The composition of exports 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.
High-tech merchandise exports have been on the rise since 2014, driven by electrical machinery and arms/ammunition, achieving a robust compound annual growth rate of 10.6%.
