India’s trade gap grew significantly in March 2025, reaching $21.54 billion, as rising oil and gold imports pushed up the country’s overall import bill. While merchandise exports showed only modest growth, the sharp surge in inbound shipments contributed to one of the highest monthly trade deficits in recent months.
According to the Ministry of Commerce, merchandise exports rose by just 0.67% year-on-year to $41.97 billion in March. This slight increase came amid uncertainty surrounding the potential imposition of reciprocal tariffs by the United States, which led to front-loading of some shipments. However, these tariffs have been temporarily paused by Washington.
Imports, on the other hand, saw a much sharper rise—growing by 11% year-on-year to $63.51 billion. This spike was largely driven by a jump in oil and gold imports. Oil imports alone stood at $19 billion in March, the highest since May 2024.
Export Growth Stagnant in FY25
Over the full financial year 2024-25, India’s merchandise exports remained nearly flat at $437.42 billion, compared to $437.07 billion in the previous year. Export activity was hit by lower global petroleum prices and restrictive trade practices, especially by the US from January onwards. In fact, exports contracted in six out of the twelve months in FY25.
Union Commerce Secretary Sunil Barthwal described FY25 as a difficult year for global trade. Geopolitical tensions, disrupted sea routes, and economic slowdowns in key markets created challenging conditions for exporters, though India managed to perform relatively better than many peer nations.
Tariff Uncertainty Clouds Outlook
The outlook for exports remains uncertain as the US government considers additional and sector-specific tariffs. Although there is currently a 90-day pause on some of these tariffs, Washington has already implemented a 10% base tariff on imports from most countries except China. Sectoral and secondary tariffs—such as those on Venezuelan oil—are also complicating the trade environment.
Despite these concerns, non-petroleum exports grew 2.2% to $37.07 billion in March, indicating some underlying strength in the broader export base.
Total trade in goods and services for FY25 touched $820 billion, up from $778 billion in the previous year, with much of the growth driven by services exports. Services exports rose 5.5% to $31.64 billion in March, while imports increased by 17.3% to $13.73 billion, resulting in a surplus of $17.88 billion. These figures are provisional and will be updated by the Reserve Bank of India.
