By Manoj Kumar and Nikunj Ohri
NEW DELHI (Reuters) -India’s merchandise trade deficit narrowed in June due to a sharp fall in imports, even as the value of exports slipped to a seven-month low following a drop in global commodity prices, data released on Tuesday showed.
The exports to the United States, India’s biggest trading partner, however, rose 23.53% year-on-year in June to $8.27 billion, defying higher tariffs since April.
The trade deficit stood at $18.78 billion in June, lower than economists’ expectations of $22.24 billion and against $21.88 billion in the previous month.
Goods exports fell to $35.14 billion in June, down 9% from May and nearly flat from a year earlier. The figure was the lowest since November’s $32.11 billion, according to LSEG data.
“India’s exports and imports in June were affected by a fall in crude oil prices,” said Sunil Barthwal, trade secretary.
Analysts said a steeper drop in non-oil imports helped compress the trade deficit – providing some relief for policymakers as it could improve the current account balance and reduce pressure on the local currency.
“Given this, and the robust growth in net services earnings, we now expect India’s current account deficit to print at a comfortable 0.7% of GDP in Q1 FY2026, a tad lower than the 0.9% seen in Q1 FY2025,” said Aditi Nayar, an economist at ICRA ratings agency.
Imports dropped to $53.92 billion from $60.61 billion in May and $56 billion in June 2024.
Crude oil imports fell to $13.7 billion from $14.7 billion in May while gold imports declined to $1.8 billion from $2.5 billion in the previous month.
For April-June, goods exports rose to $112.17 billion from $110.06 billion a year earlier, while imports climbed to $179.44 billion from $172.16 billion in the year-ago period.
Despite a higher base tariff on Indian goods exported to the U.S. of 10%, exports continued to rise.
Services trade showed an estimated surplus of $15.62 billion in June, with exports at $32.84 billion and imports at $17.58 billion, data showed.
RISE IN EXPORTS TO THE U.S.
India is engaged in negotiations with Washington to secure an interim deal aimed at staving off the threat of higher tariffs as U.S. President Donald Trump seeks to punish nations he considers do not have a reciprocal relationship with the United States.
In April-June, shipments to the U.S. rose to $25.52 billion from $20.89 billion rupees a year ago.
India’s exports to the U.S. rose 25.6% year-on-year in the first five months of 2025 to $47.15 billion, while imports rose 8.2% to $18.25 billion, widening India’s trade surplus to $28.91 billion, U.S. Census Bureau data showed.
Barclays estimates the average effective U.S. import tariff on Indian goods rose to 11.6% from 2.7% post-April.
(Reporting by Manoj Kumar and Nikunj Ohri; Editing by Mrigank Dhaniwala and Barbara Lewis)
