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Trade deficit widens to nearly $23 billion in January as exports shrink

2025-02-17 00:00:00.0 商业标准报-经济和政策原网页

India’s merchandise trade deficit widened to nearly $23 billion in January, compared with $16.5 billion a year earlier, as the value of exports dropped amid subdued demand for petroleum products and global economic uncertainties.

Exports contracted by 2.4 per cent year-on-year to $36.43 billion in January, according to data released by the commerce department. In contrast, the value of imports surged 10 per cent to $59.4 billion, raising concerns over the depreciating value of the Indian rupee.

The higher value of imports was driven by items such as gold (40.8 per cent), electronic goods (17.8 per cent), chemicals (71.8 per cent), non-ferrous metals (26 per cent), and vegetable oil (11.4 per cent). However, crude oil imports, which account for 22 per cent of India’s total import basket, fell by 13.5 per cent to $13.4 billion in January.

The decline in exports was primarily due to a 58.7 per cent year-on-year drop in exports of refined petroleum products, driven by a consistent fall in global petroleum prices and muted demand for petrochemical products.

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“Merchandise exports declined by 2.4 per cent in January 2025, with the sharp fall in oil exports weighing on the overall figure, even as non-oil exports expanded by a healthy 14.5 per cent. The sustained sharp decline in oil exports, alongside a dip in volumes, has weighed on India’s merchandise exports during April-January 2024-25, which have risen by a meagre 1.4 per cent during this period,” said Aditi Nayar, chief economist at ICRA.

On a positive note, non-petroleum and non-gems and jewellery exports — a clearer indicator of export health — grew by 14 per cent to nearly $30 billion. Key sectors showing growth included engineering goods (7.4 per cent), electronic goods (78.9 per cent), drugs and pharmaceuticals (21.4 per cent), gems and jewellery (15.9 per cent), and readymade garments (11.4 per cent).

“India’s merchandise trade deficit widened to a two-month high, driven by increases in both the oil and non-oil deficits. However, this was much lower than the monthly average of $25.9 billion seen in Q3FY25, offering some relief,” Nayar added.

Federation of Indian Export Organisations (FIEO) President Ashwani Kumar said the surge in imports, coupled with the widening trade deficit, had “raised alarm” about potential impacts on domestic industries and the overall trade balance.

Between April and January, exports grew by only 1.39 per cent, while imports surged by 7.4 per cent. “The depreciating value of the Indian rupee, which has fallen by 1.4 per cent against the US dollar since the start of the year, further exacerbates the nation’s trade challenges. The depreciation has contributed to higher import bills, particularly since India imports 90 per cent of its oil needs,” Kumar said. He added that strategic measures were needed to bolster exports and rationalise imports.

Services exports grew by 24.3 per cent to $38.5 billion in January, while services imports rose 22.8 per cent to $8.2 billion, resulting in a surplus of $20.3 billion. However, the services trade data for January is an “estimate” and will be revised based on the Reserve Bank of India’s subsequent release.