Goods exports up 0.7%, trade gap widens

India's merchandise exports grew 0.7% on-year to $41.97 billion in March, taking overall FY25 goods exports to $437.42 billion, 0.08% higher than FY24, data released Tuesday showed. A steeper rise in imports at 11.3% sharply widened the trade deficit in March to $21.54 billion compared to $14 billion in February.

Overall, India's goods trade deficit in FY25 rose to $282.82 billion against $241.14 billion in FY24.

"The last financial year was difficult with so many things happening around the world," said commerce secretary Sunil Barthwal, adding that despite global challenges, the merchandise shipments and overall exports touched the "highest" ever figures in 2024-25.

Oil imports were $19 billion in March, the highest since May 2024, when it was $19.95 billion. Exports contracted in six of the 12 months in FY25, due to softening in global petroleum prices and rising uncertainties amid the US' trade announcements since January.

The commerce department is working on a proposal to meet the short-term credit needs of e-commerce exporters and offer support to those having warehouses abroad, officials said. Anote for Expenditure Finance Committee's approval is in the works to give a boost to exports, they added.

India's exports of goods and services are estimated to reach a "record" of $820.93 billion in 2024-25, an increase of 5.5% over $778.13 billion in FY24.

In FY25, the US remained India's top export destination with total exports amounting to $86.51 billion against $77.52 billion in FY24.

"Hazarding a guess on India, there are growth concerns as well as opportunities in terms of current tariffs" an official said, adding that if India follows the bilateral trade agreement route with Washington, India's trade with the US will grow.

Services exports are estimated at $383.51 billion last fiscal against $341.06 billion in FY24. "This reflects the resilience of export sector amid rising global geopolitical tensions and trade disruptions," said SC Ralhan, president, Federation of Indian Export Organisations.

Major drivers of goods growth include engineering, electronics, pharma, ready-made garments, rice, cotton yarn/fabrics, plastics, coffee, spices, tea and tobacco. Non-petroleum exports rose 6% in 2024-25, breaking records.

Despite various sanitary and phytosanitary measures and technical barriers to trade, the exports of fruits and vegetables rose 5.6%.

Gold imports rose to $58.01 billion last fiscal against $45.54 billion.

FTA talks
Officials said the commerce department has developed capabilities to be able to deal with several FTAs simultaneously. "All FTAs are important to us. They lead to trade liberalisation. So, it's in India's interest to do all FTAs with same earnestness," said an official.