India’s merchandise trade deficit widened sharply to $30.43 billion in June, as a surge in imports driven by higher global crude oil and precious metal prices outpaced export growth, according to data released by the Commerce Ministry on Monday.Merchandise exports rose 15.5% year-on-year to $40.41 billion, up from $34.98 billion in June last year. However, imports climbed at a faster pace of 31% to $70.84 billion, compared with $54.08 billion a year ago, pushing the trade deficit up nearly 59% from $19.10 billion in June 2025.
On a sequential basis, however, the picture was less encouraging. The trade deficit widened from $28.21 billion in May, largely because exports fell more sharply than imports. Merchandise exports declined to $40.41 billion in June from $45.20 billion in May, while imports eased to $70.84 billion from $73.41 billion.
Commerce Secretary Sunil Barthwal attributed the sharp rise in imports primarily to higher global prices of crude oil and precious metals, particularly petroleum and gems and jewellery.”The higher imports of petroleum and gems and jewellery are largely due to higher global prices,” he said, adding that the increase does not necessarily reflect a proportional rise in import volumes.The government also highlighted a widening trade deficit in petroleum, electronics, and gems and jewellery. Officials noted that rising disposable incomes and robust demand from India’s growing middle class have continued to drive higher imports of electronic goods.On the export front, the Commerce Secretary said regions outside NAFTA and Europe now account for more than half of India’s merchandise exports, reflecting continued diversification of export markets. However, exports of ready-made garments declined on a year-on-year basis during the April-June quarter, indicating continued pressure in parts of the labour-intensive manufacturing sector.Meanwhile, India’s dependence on Chinese imports continued to increase. Imports from China rose to $38.04 billion in the first quarter of FY27, compared with $29.73 billion during the corresponding period last year, underscoring sustained demand for intermediate goods, electronics and manufacturing inputs despite ongoing efforts to diversify supply chains.
Source link
