India’s trade deficit narrowed to a five-month low of $20.78 billion in September 2024 as goods exports grew a nominal 0.5 per cent (year-on-year) to $34.58 billion, after a two-month consecutive fall, and import growth slowed down to 1.6 per cent to $55.36 billion.

“In merchandise, which is one sector that has been impacted globally, India is doing much better than the global average. Both in terms of merchandise and services exports, India is doing better than the rest of the world. Our exporters, despite so many difficulties, have been able to keep our head high,” Commerce Secretary Sunil Barthwal said at a media briefing on Wednesday.

Trade trends

In April-September 2024-25 exports grew by 1 per cent to $213.22 billion, while imports increased by 6.16 per cent to $ 350.66 billion. The trade deficit during the first half of the fiscal was $137.44 billion, which was higher than the trade deficit of $119.24 billion in the comparable period of 2023-24.

Indian exports had grown despite global uncertainties driven by sectors such as engineering goods, chemicals, plastic, electronics and ready-made garments, Barthwal pointed out.

Last week, the WTO had lowered its global trade growth projection for 2025 to 3 per cent from the previous 3.3 per cent while increasing it marginally to 2.7 per cent for 2024 from 2.6 per cent earlier and had warned that geopolitical tensions and policy uncertainty, largely due to the West Asia crisis, posed a downside risk to the forecast. 

Liquidity boost

Exporters’ body FIEO called for government support to increase liquidity with deeper interest subvention support and extension of interest equalisation scheme for at least five years, creating a predictable business environment for the exporters.

India’s trade deficit had increased to a 10-month high of $ 29.65 billion in August 2024 as gold imports more than doubled to a record high of $10.06 billion responding to a sharp reduction in customs duty and festive demand.

In September 2024, the import of gold was at $ 4.39 billion, much lower than the previous month, but marginally higher than gold imports in September 2023 at $ 4.11 billion.