Trade deficit shrinks in June on sharper drop in imports

New Delhi: India's goods exports in June fell a tad from a year earlier, but a sharper drop in imports aided the trade deficit to narrow to a four-month low.

Exports reduced 0.05% year-on-year to $35.14 billion, a seven month low, while imports fell 3.71% to $53.92 billion, leaving a trade deficit of $18.78 billion compared with $20.84 billion in June last year.

Exports to the US in the past month rose sharply to $25.52 billion from $20.89 billion, despite the base tariff on Indian goods shipped to the US rising to 10%.


Goods exports were 9% lower from the previous month. The trade deficit narrowed sequentially as well, from $21.88 billion in May. India's goods and services exports in April-June is estimated to be $210 billion, up 6% on-year and the highest on record for the first quarter of a fiscal year.

"If the growth continues like this, then we are going to cross last year's exports figures," said commerce secretary Sunil Barthwal.

In FY25, goods and services shipments reached a record high of $825 billion.

Exports in 14 of 30 key sectors including petroleum products, fabrics, gems and jewellery, leather, iron ore and spices fell in June, according to data released by the commerce and industry ministry on Tuesday.

"Trade in June was affected by a fall in crude oil prices," Barthwal said.

Crude oil and gold imports in June fell 8.37% and 25.73% to $13.8 billion and $1.9 billion, respectively.

Import monitoring
Barthwal said the department is monitoring "unusual surges" in imports of commodities and will take action if found that the increase in the inbound shipment was on account of any malpractice.

Last month, the government imposed import curbs on certain colloidal precious metals to check illegal inflow of gold into India in the liquid form.

EU, ASEAN trade
India and the EU will hold the next round of negotiations on the proposed free trade agreement (FTA) in September here and both sides have exchanged offers related to the services sectors last week. The last (12th) round of talks concluded last week in Brussels.

"We have exchanged our offers on services and non-services... there were discussions on that. We also discussed key interests in market access related to goods as well," said L Satya Srinivas, special secretary, Department of Commerce.

Separately, India expects to reach some kind of conclusion on the review negotiations of the existing FTA in goods with the 10-nation Asean bloc before the Asean-India Summit, scheduled for October.