NEW DELHI: India’s merchandise trade deficit touched an eight-month high of $27.35 billion in July, as a sharp rise in imports outpaced a moderate gain in exports, ahead of the looming US tariffs. India’s overall trade deficit (merchandise and services) touched $11.72 billion in July.
As per the data released by the Ministry of Trade and Commerce on Thursday, merchandise exports grew 7.3% to $37.24 billion in July, while merchandise imports grew by 8.6% to $64.59 billion. Overall exports in July stood at $68.27 billion, up from $65.31 billion in July 2024 while imports rose by 6% to $79.99 billion.
“Despite an uncertain global policy environment, India’s exports, merchandise and service, in July and in the FY2025-26 (during April- July period) have grown substantially and much higher than the global export growth. Major drivers of the merchandise exports include engineering goods, electronics goods, drugs and pharmaceuticals and organic and inorganic chemicals,” said Sunil Barthwal, Secretary, Department of Commerce.
Among major merchandise exports, petroleum products, and gems & jewelleries, witnessed a fall during April-July. Export of petroleum products has come down by more than 17% from $26.43 billion in the corresponding period of the previous year to $21.75 billion.
The US continues to be the top destination, with Indian exports to the country touching $33.53 billion during April-July, thereby witnessing a sharp rise of more than 21% as compared to the corresponding period of the previous year. Imports from the US also rose to $17.41 billion compared to $15.50 billion a year ago, the government data showed. However, with an additional tariff of 25% being announced by Donald Trump on August 6, there are concerns if India will be able to sustain its export growth trajectory in the coming months.
Trump imposed additional tariffs on India due to Delhi's continued purchase of Russian oil, thereby levying a total tariff of 50% on Indian exports – recording the highest tariff of any U.S. trading partner.