India's trade deficit widens to $34.7 billion in January

India's trade deficit widens to $34.7 billion in January

India's merchandise trade deficit widened to a three-month high of $34.68 billion in January as imports rose far more than exports.

The trade deficit in goods stood at $25.04 billion in December.

Goods exports fell to $36.56 billion in January from $38.51 billion in December, while imports jumped to $71.24 billion from $63.55 billion during the same period.

A surge in gold and silver imports primarily led to a wider trade deficit in January.

Silver imports jumped 127 percent year-on-year in January and outbound shipments of gold surged nearly 350 percent.

Merchandise exports to the US fell nearly 22 percent on-year to $6.59 billion in January.

The January numbers reflect the final impact of the United States' 50 percent tariff on India, as the effective rate has fallen to 25 percent and is expected to ease further to 18 percent as India and the US are set to sign a proposed trade agreement in March.

US President Donald Trump, earlier this month, said he would slash tariffs on Indian goods to 18 percent from 50 percent, sparking relief among exporters and policymakers. Trump said, as part of the agreement, India has agreed to cut Russian oil purchases and intends to more than double its annual imports of US goods.

India's services exports in January are estimated at $43.90 billion, up from $34.75 billion a year earlier, while services imports rose to $19.60 billion from $16.71 billion in the same month last year.

Therefore, India's total exports (merchandise and services combined) in January are estimated at $80.45 billion, up 13.17 percent from a year earlier, while total imports rose 18.76 percent year-on-year to $90.83 billion.

On a cumulative basis, merchandise exports during April–January 2025–26 rose 2.2 percent to $366.63 billion from $358.75 billion in the year-ago period.

For the April–January period, services exports are estimated at $354.13 billion compared with $320.28 billion a year earlier, while services imports increased to $173.55 billion from $166.72 billion, taking the trade surplus in this segment to $180.58 billion from $153.56 billion.

Overall, cumulative exports of merchandise and services combined during April–January 2025–26 are estimated at $720.76 billion, up 6.15 percent from $679.02 billion in the corresponding period last year.