Flat exports, high imports widen trade deficit to $21.54 in March

The country’s trade deficit widened significantly to $21.54 billion in March, compared to $15.34 billion in March 2024, as imports surged 11.4 per cent to $63.51 billion and exports rose a meagre 0.7 per cent to $41.97 billion. Persistent global uncertainties due to geopolitical tensions, ongoing wars and the unpredictability of US President Donald Trump’s tariff kept goods exports in 2024-25 remaining almost flat at $437.42 billion compared to $437.07 billion in 2023-24. Imports in 2024-25 increased 6.2 per cent to $720.24 billion. Trade deficit in FY25 increased to $282.82 billion compared to $241.14 billion in the previous fiscal. The past fiscal year was difficult for trade due to intense geopolitical tensions, slowdown and recession in key economies and impact on sea routes, Commerce Secretary Sunil Barthwal told a press interaction on trade data for FY25 and March 2025. “India, however, has done better than most countries. In fact, non-petroleum exports during the fiscal are the highest ever,” he said. According to some analysts, exports in March fared better than expected as exporters were in a hurry to send shipments before Trump’s reciprocal tariffs were imposed in April. “Merchandise export data belied expectations of front-loading of shipments ahead of the proposed tariffs, contributing to a higher-than-expected deficit figure. We now anticipate a current account surplus of $1-3 billion in Q4 FY2025, with a full year deficit of around 0.9 per cent of GDP,” according to Aditi Nayar, Chief Economist, ICRA. Going forward, the situation is uncertain as traders are not sure how things will unfold in the US. “Exporters are worried about importers holding back orders because of the uncertain situation. While the 10 per cent baseline duty that the US has imposed on most trade partners can be shared between the exporter, the importer and the consumer, players are in wait-and-watch mode as the Trump government is continuing to pull surprises,” an official told. India’s overall exports of goods and services are estimated to hit a record $820.93 billion in 2024-25, an increase of 5.5 per cent over 2023-24. The final numbers will be known when the RBI shares the official numbers on services exports. The US continued to be India’s No 1 export destination in FY25 with shipments at $86.51 billion. The UAE, with which India has an FTA, was the No 2 market with exports worth $36.64 billion. The UK, China, Singapore, Saudi Arabia, Bangladesh, Germany and Australia were among the top 10 export destinations. China was India’s top import destination with the country’s shipments totalling $113.46 billion in 2024- 25. Russia was next in line ($63.84 billion) followed by the UAE ($63.42 billion) and the US ($45.33 billion).In FY25, major drivers of growth in goods exports included engineering, electronics, pharma, readymade garments, rice, cotton yarn/fabrics, plastics, coffee, spices, tea and tobacco. Items that posted a fall in exports included petroleum products, gems & jewellery, and organic and inorganic chemicals.