India’s Trade Deficit Widens to $22.99Bn in January Amid Rising Imports, Weak Rupee

India's trade deficit widened further to $22.99bn in January as compared to $21.94bn in the previous month, according to data released by the commerce ministry on Monday. The gap was primarily driven by rising import bills due to a rapidly weakening rupee.

The trade deficit is the difference between exports and imports.

On the other hand, goods imports rose to $59.42bn, a surge from $53.88bn in the year-ago period. Merchandise imports in December stood at $59.95bn.

The trade deficit witnessed a 24.85% year-on-year growth. The cumulative value of merchandise exports for April 2024-January 2025 reached $358.91bn, marking a 1.39% YoY increase, while goods imports stood at $601.90bn, 7.43% up annually.

Following a mismatch in gold shipment data due to a data-transmission transition, the ministry revised April-November import figures downward last month.

The combined value of merchandise exports for April-January in this financial year stood at $358.91bn, showcasing a 1.39% increase annually, while goods imports stood at $601.90 bn, up 7.43% YoY.

However, India's services export spiked to $38.55bn in January as compared to $32.66bn in December and $31.01bn a year ago.

On the other hand, services imports also rose to $18.22bn in January from $17.50 billion in December and $14.84bn in the earlier year.

With this, the cumulative value of merchandise and services exports touched $74.98bn in January, up from $70.67bn in December, and $68.33bn in the year-ago period.

Global Headwinds: Trade Policy Shift

The Economic Survey 2025 warned Indian export sectors to brace themselves for global trade policy shifts. It said that with rapidly evolving global trade dynamics backed by gradual shifts towards protectionism, the sector needs to strengthen its competitiveness to get further integrated into global supply chains.

“The country can focus on reducing trade-related costs and enhancing export facilitation to create a more vibrant export sector. This proactive approach will help India continue to thrive in an ever-changing global market,” said the report.

The survey also highlighted that chemicals, machinery, textiles and electronics sectors are among the key sectors likely to face headwinds.