India’s trade deficit lowest in three and a half years amid tariff war

New Delhi| The country’s trade deficit narrowed to $14.05 billion in February, 2025, as imports fell amid a worldwide tariff war. This is its three-and-a-half-year low since August, 2021. What is special is that the trade deficit is much lower than economists’ forecast of $21.65 billion.

India’s exports of commodities declined for the fourth consecutive month to $36.91 billion due to fluctuations in petroleum prices and global uncertainties, according to data released on Monday by the Ministry of Commerce and Industry. In the same period a year ago, the figure stood at $41.41 billion. Imports also declined to a near two-year low of $50.96 billion during this period. This is the lowest import since April, 2023. A total of $60.92 billion was imported in February, 2024.

Exports of goods showed a decline in value terms in four months (November, 2024-February, 2025). $36.43 billion was exported in January, down from $37.32 billion a year earlier. It dropped to $38.01 billion in December and $32.11 billion in November. Asked about the trade deficit figure falling to its lowest level since August, 2021, an official said, These are quick projections. We are examining the details of this decline in imports.

Exports up 6.24 percent in 11 months
In the first 11 months (April-February) of the current financial year, goods-services exports increased by 6.24 per cent to reach $750.53 billion. $706.43 billion was exported from the country in the same period of 2023-24.

Top-5 export destinations, Japan with highest growth
In value terms, the five countries to which the highest number of commodities were exported from India in February included the US (9.1 per cent), the United Arab Emirates (5.19 per cent), the UK (12.47 per cent), Japan (21.67 per cent) and the Netherlands (3.68 per cent).

Decline in imports of gold and crude oil
According to Commerce Ministry data, gold imports declined to $2.3 billion in February, from $2.68 billion in January. Crude oil imports also declined to $11.8 billion, compared to $13.4 billion. Imports of non-petroleum, non-gem jewellery (gold, silver and other precious metals) rose to $35.02 billion compared to $33.96 billion a year earlier.