Last Updated on September 15, 2025 9:34 pm by BIZNAMA NEWS
R. Suryamurthy
India’s merchandise exports grew 6.7% in August to $35.1 billion, buoyed by robust shipments of electronics, gems and jewellery, and pharmaceuticals, while imports fell more than 10%, helping narrow the trade deficit to its lowest in a year.
Data released by the commerce ministry on Monday showed merchandise imports at $61.59 billion, down from $68.53 billion a year earlier. This pulled the merchandise trade deficit down to $26.5 billion from $35.6 billion in August 2024, when a surge in gold imports had distorted the numbers.
Aditi Nayar, Chief Economist at ICRA Ltd., said the August trade deficit was above the April–July monthly average of $23.7 billion but “significantly lower” than a year ago. “India’s non-gold merchandise trade deficit moderated to $21 billion in August from $23 billion in August 2024, driven by higher exports and lower non-oil, non-gold imports,” she noted.
Overall, India’s total exports of goods and services in August stood at $69.16 billion, a 9.3% year-on-year rise, while imports dropped 7% to $79.04 billion. This brought the overall trade gap to $9.9 billion, less than half the $21.7 billion gap recorded a year earlier.
Electronics, Gems and Pharma Drive Gains
Electronics remained a standout, with exports surging nearly 26% to $2.93 billion. Gems and jewellery exports climbed 15.6% to $2.31 billion, while pharmaceuticals rose 6.9% to $2.51 billion. Engineering goods and petroleum products also saw steady growth.
Agriculture added support, with shipments of rice, tea, meat and dairy products posting double-digit growth.
Industry Sees “Encouraging Signal”
S C Ralhan, President of the Federation of Indian Export Organisations (FIEO), called the August performance “a welcome and encouraging sign” for India’s export sector amid global headwinds and geopolitical uncertainties.
“The 6.7% year-on-year growth in exports, coupled with a decline in imports by over 10%, has eased the trade deficit significantly. This reflects the resilience and competitiveness of Indian exporters,” Ralhan said. He credited diversification of markets, gains in high-growth sectors and government policy support for the momentum.
FIEO, however, urged the government to provide enhanced support for micro, small and medium enterprises (MSMEs) and to ensure timely disbursement of export incentives. “Sustained efforts on ease of doing business, faster trade facilitation, skilling and global market access will be key to maintaining this growth,” Ralhan said.
Five-Month Picture Mixed
During April–August 2025, merchandise exports grew 2.5% to $184.1 billion while imports rose 2.1% to $306.5 billion, leaving a trade deficit of $122.4 billion. Services continued to be the buffer: exports jumped 10.6% to $165.2 billion in the same period, producing a $81 billion surplus that helped offset the merchandise gap.
Non-petroleum exports rose 7.4% to $158.1 billion over the five months, while non-petroleum, non-gems and jewellery exports were up 7.8% at $146.7 billion.
Key Partners
The U.S., China, the UAE, Hong Kong and Germany emerged as the top growth markets during April–August, with shipments to the U.S. up 18.1% and to China nearly 20%. On the import side, China, Ireland, the UAE, Hong Kong and the U.S. saw the strongest growth in supplies to India.
Looking Ahead
Economists caution that while August’s export rebound is encouraging, the slowdown in global trade, U.S. tariff measures and weak European demand could weigh on India’s performance in the coming quarters. Analysts also point to continued dependence on services trade surplus to cushion the merchandise deficit.
Still, exporters remain optimistic. “With strategic support and global market stabilization, India is well-positioned to strengthen its trade performance in the remaining fiscal period,” Ralhan said.
