Media365
India’s merchandise trade deficit widened to $30.43 billion in June, higher than market expectations, as exports declined more sharply than imports amid shipping disruptions triggered by tensions in the Middle East.
Government data released on Monday showed that merchandise exports fell to $40.41 billion in June from $45.2 billion in May, while imports declined to $70.84 billion from $73.41 billion during the same period.
The trade gap was significantly wider than economists’ estimate of $26.63 billion in a Reuters poll and also exceeded May’s deficit of $28.21 billion.
The decline in exports was largely attributed to disruptions in shipping routes through the Strait of Hormuz, a key global maritime corridor affected by the recent conflict in the Middle East. The disruptions increased logistical challenges for exporters and weighed on outbound shipments.
The latest trade data comes at a crucial time as India continues negotiations with the United States for an interim bilateral trade agreement while seeking to diversify export markets amid global geopolitical uncertainties.
Speaking on the proposed India-US trade pact, Commerce Secretary Rajesh Agrawal said discussions are progressing smoothly. He said the framework for the agreement is ready and will be signed “whenever it is the right time,” adding that India does not foresee any major challenges in the negotiations.
Despite the weak monthly merchandise numbers, trade officials noted that overall goods exports during the April-June quarter rose around 15 per cent year-on-year, supported by higher-value petroleum shipments even as geopolitical tensions disrupted global trade flows.
India’s services sector continued to provide a cushion to the external sector. The Commerce Ministry estimated services exports at $33.03 billion in June, while services imports stood at $17.92 billion, resulting in a services trade surplus of $15.11 billion.
The latest figures underscore the challenges facing India’s export sector as global trade remains vulnerable to geopolitical disruptions, even as policymakers push to strengthen market access through new trade agreements and sustain export momentum.
