India's Trade Deficit Jumps 59% To $30.43 Bn In June On Costlier Oil, Gold

India's merchandise trade deficit widened sharply to $30.43 billion in June, as a surge in imports driven by higher global crude oil and precious metal prices outpaced export growth, according to data released by the Commerce Ministry on Monday.

Economists had expected the trade deficit to be $26.63 billion in June, according to a Reuters poll, compared with a deficit of $28.21 billion in the previous month.

Exports And Imports Both Rise Sharply

Merchandise exports rose 15.5% year-on-year to $40.41 billion in June, up from $34.98 billion in the same month last year. Imports, however, climbed at a faster pace of 31% to $70.84 billion, compared with $54.08 billion a year ago. This pushed the trade deficit up nearly 59% from $19.10 billion in June 2025.

On a sequential basis, the trade deficit widened from $28.21 billion in May, mainly because exports fell more sharply than imports. Merchandise exports declined to $40.41 billion in June from $45.20 billion in May, while imports eased to $70.84 billion from $73.41 billion during the same period.

Commerce Secretary Rajesh Agrawal attributed the sharp rise in imports mainly to higher global prices of crude oil and precious metals, particularly petroleum and gems and jewellery. "The higher imports of petroleum and gems and jewellery are largely due to higher global prices," he said at a press conference, according to reports. He added that the rise does not necessarily reflect a proportional increase in import volumes.

The government also pointed to a widening trade deficit in petroleum, electronics, and gems and jewellery. It said rising disposable incomes and strong demand from India's growing middle class have continued to drive higher imports of electronic goods.

The Commerce Secretary said regions outside NAFTA and Europe now account for more than half of India's merchandise exports, reflecting continued diversification of export markets. However, exports of ready-made garments declined year-on-year during the April-June quarter, pointing to continued pressure in parts of the labour-intensive manufacturing sector.

India's dependence on Chinese imports also continued to increase. Imports from China rose to $38.04 billion in the first quarter of FY27, compared with $29.73 billion during the same period last year. This reflects sustained demand for intermediate goods, electronics and manufacturing inputs, despite ongoing efforts to diversify supply chains.