India's Trade Update: March Goods Deficit Reaches $21.54 Billion, Surplus with the US Climbs to $41.18 Billion

India’s Trade Surplus with the U.S. Sees Significant Growth

In an impressive turn of events, India’s trade surplus with the United States surged by 16.6% in the recently concluded financial year, climbing to $41.18 billion for FY25, up from $35.32 billion in the previous fiscal year. This remarkable growth occurred even as former President Donald Trump announced plans to raise tariffs on Indian goods, citing concerns over the U.S. trade deficit.

Export Growth to the U.S.

According to the latest data from the Commerce Ministry, India’s exports to the U.S. rose by 11.6%, increasing from $77.52 billion in FY24 to $86.51 billion in FY25. Key exports included:

Electronic goods
Textiles
Pharmaceuticals
Engineering products
Gems and jewelry
Agricultural products

While imports from the U.S. also increased, they did so at a slower rate of 7.42%, rising from $42.20 billion to $45.33 billion during the same period.

Global Trade Deficit Widening

On a broader scale, India’s trade deficit expanded significantly in March, reaching $21.54 billion, a rise from $14.05 billion in February. Merchandise exports for FY25 totaled $437.42 billion, a slight increase over the previous year’s $437.07 billion. Meanwhile, imports surged to $720.24 billion, up from $678.21 billion in FY24.

March’s exports stood at $41.97 billion
Imports were $63.51 billion
Oil imports skyrocketed to $19 billion, a notable rise from $11.8 billion in February

Services and Overall Trade Performance

India’s total exports of goods and services for the current fiscal year saw an increase of 5.39%, reaching $820.93 billion, while imports grew by 6.96%, totaling $915.19 billion. Notably, services exports climbed by 12% to $383.51 billion.

Despite the overall growth, the goods export figure of $437.42 billion fell short of analysts’ expectations, with the Export-Import Bank of India projecting $446.5 billion for the fiscal year.

Trade Relations with China

Interestingly, India’s imports from China rose by 11.5%, increasing from $101.74 billion in FY24 to $113.46 billion in FY25. Conversely, exports to China saw a decline of 14.5%, dropping from $16.67 billion to $14.25 billion.

Future Prospects

Commerce Secretary Sunil Barthwal expressed optimism regarding the export sector, emphasizing the surpassing of the $800 billion export milestone. He stated, "The export sector has performed exceptionally well, and we are aiming for an even larger target for this fiscal."

Experts like Colin Shah, Managing Director of Kama Jewelry, noted the marginal rise in exports in March as a positive sign for the gems and jewelry sector, which has faced challenges in recent times. However, he cautioned against the ongoing pressures from global uncertainties and tariff threats, advocating for timely measures to support recovery in the industry.

Conclusion

Despite facing challenges from geopolitical tensions and fluctuating commodity prices, India’s trade landscape shows resilience. With the U.S. remaining a key partner and expectations for continued growth in exports, the future holds promise for India’s trade ambitions as it navigates these turbulent waters.