India’s goods trade deficit fell to a 30-month low of $14.05 billion in February 2025, a sharp decline from $22.9 billion in January, according to data from the Commerce Ministry.
The narrowing trade gap was primarily driven by a steep fall in imports, marking a significant reduction from $19.51 billion in February 2024.
India’s total imports dropped 16% year-on-year (YoY) to $50.96 billion in February, compared to $60.92 billion in the same month last year. Meanwhile, exports also fell 11% YoY to $36.91 billion from $41.41 billion in February 2024.
Services trade also saw a decline, with services exports estimated at $35.03 billion in February, down from $38.55 billion in January.
Similarly, services imports stood at $16.55 billion, lower than $18.22 billion recorded in the previous month.”These are quick estimates. We are looking into the details of (the) fall in imports,” said trade official Satya Srinivas.
India’s gold imports slipped to $2.3 billion in February, down from $2.68 billion in January, while crude oil imports fell to $11.8 billion from $13.4 billion in the previous month.
For the first time since May 2021, India recorded an overall trade surplus of $4.5 billion in February when both goods and services were accounted for. This development raises the possibility that the country could register a current account surplus of $20 billion for the January-March quarter.
Consequently, the full-year current account deficit (CAD) could decline to 0.5%-0.7% of GDP, significantly lower than earlier estimates of 1%-1.2%.
Commerce Ministry officials noted that India’s monthly trade deficit typically fluctuates between $15 billion and $25 billion, sometimes touching $30 billion. However, February’s unusually low deficit of $14 billion has raised concerns about a potential softening in economic activity.
India’s trade deficit narrowing to a 30-month low signals a significant shift driven by declining imports. The rare overall trade surplus of $4.5 billion in February raises optimism for a lower current account deficit. However, concerns persist over slowing economic activity, with officials closely monitoring the impact of declining trade volumes on future growth prospects.
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Published on: Mar 18, 2025, 9:17 AM IST
Dev Sethia
Dev is a content writer with over 2 years of experience at Business Today, Times of India, and Financial Express. He has also contributed stories in Hindi for BT Bazaar and Khalsa Bandhan News Paper. A journalism postgraduate from ACJ-Bloomberg, Dev enjoys spending his spare time on the cricket pitch.
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