India’s Trade Deficit Expands To USD 22.9 Bn In Jan 2025 Amid Growing Imports

New Delhi, Feb 17 (KNN) India's trade deficit expanded to USD 22.9 billion in January 2025, up from USD 21.94 billion in December, primarily due to increased import expenses resulting from a depreciating national currency. 

This development occurs within a broader context of growing trade activity for the country during the current fiscal year.

For the April-January period of the current fiscal year, exports demonstrated moderate growth of 1.39 percent, reaching USD 358.91 billion, while imports increased more substantially by 7.43 percent to USD 601.9 billion. 

This divergence in growth rates between exports and imports has contributed to the widening trade gap.

Trade Secretary Sunil Barthwal offered a positive assessment of the situation, noting that both merchandise and services exports are performing "extremely well." 

He specifically identified electronics goods as a primary driver of export growth, followed by pharmaceuticals, drugs, and rice exports, during a press briefing in New Delhi.

January's merchandise exports totaled USD 36.43 billion, representing a decrease from December's figure of USD 38.01 billion. Similarly, imports showed a marginal decline, registering at USD 59.42 billion in January compared to USD 59.95 billion in the previous month. 

The service sector presented a different picture, with exports estimated at USD 38.55 billion in January, a significant increase from December's USD 32.66 billion, while services imports rose modestly to USD 18.22 billion from USD 17.50 billion.

A notable trend in January's import composition reveals a substantial reduction in gold imports, which fell to USD 2.68 billion from USD 4.7 billion in December. 

Similarly, crude oil imports decreased to USD 13.4 billion from the previous month's USD 15.2 billion, according to official data.

It is worth noting that the government had previously reported an all-time high trade deficit of USD 37.84 billion in December last year. 

However, this figure was subsequently revised downward to USD 32.84 billion following adjustments to gold import calculations.

The comparative improvement in the trade deficit between December and January appears to have been influenced by reduced gold imports, driven by elevated global prices that dampened demand. 

According to a Union Bank of India report, gold prices have been trending upward due to global market uncertainties, making purchases more expensive for Indian consumers.

Furthermore, the conclusion of India's festival and wedding season, periods traditionally associated with heightened gold demand, has contributed to the diminished appetite for gold imports, thus helping to moderate the overall trade deficit despite the challenging currency situation.

(KNN Bureau)