India’s goods trade deficit widens to a five-month high of $26.42 billion in April on surging imports

Merchandise exports rose to $38.49 billion in April by value from $35.30 billion in the year-ago period.

Goods imports rose to $64.91 billion by value in April, up from $54.49 billion a year ago.

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March's goods exports stood at $41.97 billion, while imports were $63.51 billion, compared with $36.91 billion of exports and $50.96 billion of imports in February.

The merchandise trade deficit—the difference between exports and imports—stood at $21.54 billion in March, $14.05 billion in February, $23 billion in January and $19.19 billion in April 2024.

The latest figure exceeded economists' expectations of $20 billion, according to a Reuters poll.

Global uncertainties

India’s widening trade deficit in April comes amid lingering global trade tensions.

Last month, President Trump briefly imposed reciprocal tariffs on imports from key partners, including India, before pausing them to allow space for negotiations.

The two countries have since worked toward a limited trade deal to ease market access and tariff barriers—a modest but crucial step as India’s import bill continues to rise.

Adding to external pressures, the India-Pakistan conflict has further strained regional trade dynamics.

Heightened tensions have halted formal exchanges, affecting border economies and informal trade channels.

The instability also deters investor confidence in the region, compounding challenges for India’s trade outlook amid already rising import bills and global tariff uncertainties.

Also read: Traders, economists heave a sigh of relief as Indo-Pak border tensions recede

To be sure, India's good exports to the US stood at $8.42 billion in April, down from $10.13 billion in March.

Services exports rise

Services exports rose to $35.31 billion by value in April, up from $31.64 billion in March and $30.18 billion in the same period of the previous year.

Services imports stood at $17.54 billion in April, rising from $13.73 billion in March and $16.76 billion in the year-ago period.

The combined value of merchandise and services exports touched $73.80 billion in April, up from $65.48 billion a year ago.

India’s export drivers

Engineering goods, petroleum products, electronic goods, gems and jewellery, drugs and pharmaceuticals, organic and inorganic chemicals, ready-made textile garments and rice were among the top export commodities during April, while top imports included petroleum and crude products, electronic goods, machinery, gold, coke, transport equipment, etc., according to commerce ministry data.

India’s major export destinations during April were the US, the UAE, the Netherlands, China and Singapore. Meanwhile, China, Russia, the UAE, the US and Iraq remained the top suppliers, reflecting the country’s dependence on oil imports.

Non-petroleum exports in January were valued at $32.86 billion, reflecting a 14.5% increase annually.

For the April-January period, cumulative non-petroleum exports stood at $305.84 billion, up 7.9% annually.

Meanwhile, India's non-petroleum exports in April, under merchandise trade, were valued at $31.11 billion, while non-petroleum imports were valued at $44.20 billion, compared to $28.26 billion and $37.99 billion, respectively, in the year-ago period.

Speaking to the media after the release of the latest trade data, the Commerce Secretary Sunil Barthwal said, despite rising transportation and insurance costs globally, Indian exports have shown resilience, with exporters adapting well and maintaining stability in their operations.

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The government’s support for exporters, through schemes like the Production-Linked Incentive and initiatives targeted at SMEs/MSMEs and core industries, have played a key role in driving export growth, the commerce secretary said.

“It has resulted in strong export growth, and the optimism seen in April and May shows that India (is on track) to sustain this export momemtum," he added.