By bigbreakingwire 
India’s trade deficit increased to $22.99 billion in January 2025, up from $21.94 billion in December 2024, as imports surged by 10.3% year-on-year, according to data from the Ministry of Commerce and Industry. The trade gap exceeded economists’ median forecast of $21 billion.
Exports Decline, Imports Surge
In January 2025, India’s exports fell by 2.4% to $36.43 billion, compared to $37.32 billion in January 2024. Meanwhile, imports climbed to $59.42 billion, a sharp increase from the previous year’s $37.32 billion.
On a cumulative basis, India’s exports between April 2024 and January 2025 saw a 7.21% year-on-year growth, adding $46 billion to the total export value. Notably, non-petroleum exports grew by 14.47%, with electronic goods exports soaring by 78.97% and pharmaceutical exports increasing by 21.46%. The gems and jewellery sector also showed resilience, despite global economic uncertainties.
Weaker Rupee and Global Uncertainties Impact Trade
A significant factor behind the rising import bill is the depreciating rupee, which has fallen 1.5% against the US dollar since the start of 2025. This has made imports, especially oil, more expensive, as India depends on overseas markets for 90% of its crude oil needs.
Adding to the challenges, global geopolitical uncertainties have impacted India’s outbound shipments. The country also faces potential trade risks due to US President Donald Trump’s proposal for reciprocal tariffs on trade partners.
Government’s Focus on Export Growth
To address trade challenges, the Union Budget 2025 has made exports a priority. The government has launched an Export Promotion Mission to support new exporters, explore untapped markets, and encourage innovative products.
Additionally, India and the United States have started discussions on a potential early trade deal. As part of this, India has committed to buying more energy and military equipment from the US to strengthen trade relations.
Rising Trade Deficit Over the Year
The trade deficit for January 2025 stood at $22.99 billion, significantly higher than $16.56 billion in January 2024, marking a 24.85% year-on-year increase.
From April 2024 to January 2025, India’s cumulative trade deficit reached $87.47 billion, compared to $70.06 billion during the same period in the previous year.
With the government’s renewed focus on exports and ongoing global trade negotiations, India aims to navigate its trade challenges while boosting economic growth in the coming months.
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