India's June trade deficit jumps 59% YoY to $30.43 bn

India's merchandise trade deficit surged 59% year-on-year to $30.43 billion in June, up from $19.10 billion in the same month last year.

Economists had ⁠expected trade deficit to be $26.63 billion in June, according to a ‌Reuters poll, compared with a ⁠deficit of $28.21 billion in the previous month.

Merchandise exports ⁠fell to $40.41 ‌billion in May from $45.2 billion in the previous ⁠month, government data showed, while imports fell to $70.84 billion against $73.41 billion in May.


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The data underscores pressure on India to sustain exports and contain import costs as it holds out for a ‌better deal with the United States, with Prime Minister Narendra Modi drawing confidence from ⁠new trading partners and recent electoral gains at home.
The trade ministry estimated services exports at $33.03 billion in June and services imports at $17.92 billion, leading to an estimated services trade surplus of $15.11 billion.

India’s strong hand

Commerce Secretary Rajesh Agrawal addressing a press conference gave an update on India-US trade deal and said "We don't see any challenge in negotiations. Consultations are progressing in the right direction, and both sides remain positive. India-US framework trade deal is ready for signing at an appropriate time. Trade ties continue to strengthen, including energy imports from the US."

Rising exports, new trade deals with other countries and blocs and eased economic risks have strengthened India's hand in US trade deal, trade analysts told Reuters.

In April-June, India's overall goods exports rose about 15% from a year earlier despite disruptions from the war on Iran, buoyed by pricier petroleum shipments, officials said.

Exports to Gulf countries have recovered to pre-war levels, rising to $5.3 billion in May from $2.62 billion in March as traders shifted to alternative shipping routes, while exports to the United States edged up to $17.29 billion during April ‌and May.

India is also broadening access to other developed markets, with a UK free trade pact set to take effect this month, and an EU agreement expected by early next year.

The interim U.S.-Iran peace deal improved India's economic outlook by easing oil prices, Goldman Sachs economist Santanu Sengupta said in a report.

The bank has raised its 2026 growth forecast for India to 6.8%, and lowered its inflation and current-account deficit estimates, suggesting New Delhi has more economic room to hold out for better terms.

A weaker rupee has also improved exporters' competitiveness.