India’s Feb trade deficit narrows to 3-yr low as exports, imports shrink
New Delhi: India’s merchandise trade deficit dropped to a three-year low of $14.05 billion in February, largely due to a steep 30 percent decline in petroleum exports to Europe and a more than 60 percent fall in gold imports, media reports said.
Indian Express reported, citing data released by the Ministry of Commerce and Industry that India’s petroleum imports also saw a 26 percent decline, the data showed.
The drop in export and import of petroleum, previously a major driver of India’s export growth following the war, comes in the wake of sweeping US sanctions on Russia’s oil trade announced on January 10, which targeted 183 oil tankers.
Overall, exports contracted for the fourth consecutive month, falling 10.8 percent to $36.9 billion in February, according to the report.
However, imports declined at a steeper rate of 16.3 percent, reaching $50.96 billion—the lowest level since April 2023, it added.
Meanwhile, non-petroleum and non-gems and jewellery exports recorded a 5 percent drop.
“It has been a very difficult year, but looking at the progress, overall exports this year will be more than $800 billion,” Indian Express quoted Commerce Secretary Sunil Barthwal as saying.
Aditi Nayar, chief economist at ICRA, said that based on the data the current account is likely to post a surplus of about $5 billion in Q4FY25, equivalent to roughly 0.5 percent of GDP, said the report.
Among key sectors, chemical exports declined by 24.5 percent to $2.2 billion, while gems and jewellery exports shrank by 20.7 percent to $2.5 billion.
With restrictions on steel imports continuing, the iron and steel category saw a 23 percent drop in imports.
On the services front, exports grew 23 percent to $35 billion in February, while imports rose 8.6 percent to $16.5 billion.
For April-February, services exports increased 14 percent year-on-year to $354.9 billion, with imports up 13.3 percent at $183.2 billion.
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