India’s merchandise trade deficit rose to US$ 26.42 billion in April 2025, driven by higher imports. The government stated that in April, exports were valued at US$ 38.49 billion and imports at US$ 64.91 billion, compared to March figures of US$ 41.97 billion for exports and US$ 63.51 billion for imports. The widening deficit highlights the continued volatility in global trade, driven by factors such as tariff measures introduced under Trump’s policies. However, exports to the U.S. surged 27% despite new tariffs, with mobile phones leading growth. India is currently negotiating a trade deal with the U.S., proposing major tariff cuts to boost bilateral trade and resolve market access issues.
India’s merchandise trade deficit widened to US$ 26.42 billion in April 2025, significantly exceeding economists’ forecast of US$ 20 billion and rising from US$ 21.54 billion in March, according to a Reuters analysis of government data released on May 15. Compared to April 2024, when the deficit stood at US$ 19.2 billion, the gap also reflects a year-on-year increase.
Provisional data from the commerce ministry showed merchandise exports rose 9% year-on-year to US$ 38.49 billion in April, though this was down from US$ 41.97 billion in March. Imports, on the other hand, surged 19% to US$ 64.91 billion, up from US$ 63.51 billion the previous month.
Key contributors to export growth included electronic goods, which jumped nearly 40% year-on-year to US$ 3.69 billion; engineering goods, up 11.3% to US$ 9.51 billion; and gems and jewellery, which rose nearly 11%.
On the import side, petroleum products drove the increase, rising to US$ 20.72 billion from US$ 19 billion in March. Non-oil imports also climbed to US$ 44.20 billion, up from US$ 37.99 billion in April 2024. Gold imports grew modestly to US$ 3.10 billion from US$2.95 billion a year ago. In the services sector, exports rose to an estimated US$ 35.31 billion from US$ 30.18 billion in April 2024, while imports increased to US$ 17.54 billion from US$ 16.76 billion.
Combining both goods and services, total exports in April 2025 were estimated at US$73.80 billion, up 12.7% year-on-year. Total imports stood at US$82.45 billion, marking a 15.7% increase. As a result, India’s overall trade deficit for April was US$ 8.7 billion, significantly narrower than the merchandise-only gap.
According to Commerce Secretary Sunil Barthwal, “Indian exports are more resilient and the strategy to focus on 20 countries where we have 60 percent of our exports have worked.” He added, “India will maintain this export momentum despite issues due to the external sector.”
India-US trade relations
In April, the United States imposed a 26% tariff on Indian goods—lower than the rates applied to competitors like China, Vietnam, and Bangladesh. Despite this, India’s exports to the U.S. rose sharply by 27% year-on-year to US$ 8.42 billion, up from US$ 6.61 billion. Electronic goods, especially mobile phones, recorded the highest growth at 33%.
The U.S. tariffs, described by the White House as “reciprocal,” were part of broader levies targeting several nations. However, they were temporarily suspended for 90 days until July 8, while a separate agreement was reached to pause tariffs on Chinese goods.
Amid ongoing negotiations, President Donald Trump revealed that India has proposed a trade deal offering “basically zero tariffs” on a wide range of American goods. High-level talks between Washington and New Delhi are underway to resolve tariff and market access issues.
According to a Reuters report on May 9, India has suggested reducing its average tariff differential with the U.S. from around 13% to under 4%—a significant 9-percentage-point drop. Under the proposed deal, India has offered to eliminate tariffs on 60% of tariff lines in the initial phase, marking a major step toward aligning with global trade norms.
