India’s trade deficit narrows to $27.1 billion in February

New Delhi: India’s trade deficit narrowed to $27.1 billion in February, from a high of $34.68 billion recorded in the previous month, as imports of gold, silver and energy products moderated, data released by the Ministry of Commerce and Industry showed on Monday.

However, on a year-on-year basis, the trade deficit in February was higher. It stood at $14.42 billion in February 2025.

India’s imports jumped from $51.33 billion in February 2025, to $63.71 billion in February this year, registering a year-on-year increase of over 24%. However, it was lower from January’s $71.24 billion.

India’s exports declined marginally to $36.61 billion in February, from $36.91 billion recorded in the same month, last year.

“This year has been challenging for Indian exports and there are logistical challenges due to the West Asia crisis,” Commerce Secretary Rajesh Agrawal said.

He added that India’s outbound shipments may face further pressure in March due to logistical disruptions linked to the ongoing crisis in West Asia.

Federation of Indian Export Organisations (FIEO) president SC Ralhan said the conflict has heightened global trade uncertainty. “Disruptions in key maritime routes, including the Strait of Hormuz and the Red Sea have forced vessels to reroute, increasing freight costs, insurance premiums, and transit times, thereby adding pressure on exporters,” he added.

India’s total exports (merchandise and services combined) increased by 11.05% to $76.13 billion in February, while total imports rose at a sharper pace of 21.64%, to $80.09 billion during the month under review.

Cumulative merchandise exports during April-February 2025-26 stood at $402.93 billion, as compared to $395.66 billion recorded in the corresponding period of the previous year. Merchandise imports during the first 11 months of the current fiscal jumped to $713.53 billion, from $657.46 billion recorded in April-February 2024-25.

In the first 11 months of the current financial year, merchandise trade deficit widened to $310.60 billion, from $261.80 billion recorded in the corresponding period of 2024-25.

Engineering Exports Promotion Council of India chairman Pankaj Chadha said the “impact of energy market volatility has so far been limited in India, but there is growing uncertainty about price stability going forward”.

“The world seems to be changing rapidly. The trade outlook just a month back appeared to be stable, but now it seems clouded,” he said.

“The engineering exports sector cannot remain insulated from the happenings in West Asia. It is important to note that the UAE and Saudi Arabia are our second and third-largest export markets, respectively, after the US. The ongoing conflict is also expected to take a toll on our exports to West Asia and North Africa, considering that the UAE and Saudi Arabia are gateways to those markets,” Chadha added.