India’s trade performance for June 2025 reveals a stagnant export landscape, with merchandise exports remaining nearly flat at $35.14 billion, mirroring last year’s $35.16 billion. This comes alongside a trade deficit of $18.78 billion, as reported by government data released today, reflecting the challenges facing India’s trade sector.
The Current Trade Picture
India’s merchandise exports in June showed little change year-on-year, indicating a lack of significant growth amid global economic uncertainties. Imports, however, declined by 3.71% to $53.92 billion, down from $56 billion in the same month last year. This reduction in imports contributed to narrowing the trade deficit from $21.88 billion in May, though the gap remains substantial.
Quarterly Performance
For the April-June quarter of the financial year 2025-26, exports saw a modest uptick of 1.92%, reaching $112.17 billion, while imports rose 4.24% to $179.44 billion. This suggests a slight improvement over the month’s flat performance, driven by efforts to boost key sectors, though global trade tensions continue to pose hurdles.
Underlying Factors
The stagnant export growth may reflect challenges such as trade disruptions, including tensions in the Strait of Hormuz due to the recent Israel-Iran conflict, and potential U.S. tariff threats under President Trump. On the import side, the decline could be linked to reduced demand for commodities like oil and gold, influenced by global price fluctuations and domestic policy measures.
Future Outlook
With the government targeting a $1 trillion export goal by FY26, the flat June figures underscore the need for accelerated reforms. Initiatives like the Production Linked Incentive (PLI) schemes and ongoing Free Trade Agreement (FTA) negotiations with the U.S. and EU are critical to reversing this trend. However, the trade deficit’s persistence highlights the urgency of addressing import dependency and enhancing export competitiveness.
