June 2025 trade deficit moderates to $18.78 billion

INDIA JUNE 2025 TRADE – DATA CHECK

For June 2025, merchandise trade deficit narrowed for the second month in a row. From $26.42 Billion in April, trade deficit tapered to $21.88 Billion in May, and further to $18.78 Billion in June 2025. Over last 2 months, trade deficit is down -28.9%. There was an all-round fall in value of oil imports and gold imports. It more than offset the tepid show by exports amidst the global uncertainty.

Key contributors to exports in June 2025 were Engineering Goods $9.50 Billion (+1.4%), Petroleum Products $4.62 Billion (-15.9%), Electronic Goods $4.15 Billion (+46.9%), Drugs & Pharmaceuticals $2.62 Billion (+6.0%), and Organic & Inorganic Chemicals $2.33 Billion (+1.7%). Key import contributors were crude & petroleum products $13.80 Billion (-8.4%), Electronic Goods $8.42 Billion (+9.5%), Machinery $4.43 Billion (+8.5%), Coal / Coke / Briquettes $2.38 Billion (-19.1%), and Chemicals $2.26 Billion (-8.9%).

Top export destinations for June 2025 were United States $8.30 Billion, United Arab Emirates (UAE) $2.63 Billion, the Netherlands $1.49 Billion, China $1.38 Billion, and United Kingdom $1.15 Billion. Top import originating nations were China $9.52 Billion, Russia $4.74 Billion, United Arab Emirates (UAE) $4.74 Billion, United States $3.99 Billion, and Saudi Arabia $2.16 Billion.

HOW MERCHANDISE TRADE EVOLVED IN LAST 1 YEAR

Here is the monthly data of merchandise exports, imports, and trade deficit.

Data Source: DGFT (# – All time high trade deficit)

How do trade figures compare with 12-month averages. Over last 12 months, the average merchandise exports stood at $36.69 Billion, while average merchandise imports stood at $60.25 Billion. For June 2025 exports and imports are lower than the 1-year average. The average trade deficit in last 12 months stood at $(23.56) Billion; with the June 2025 trade deficit sharply lower at $(18.78) Billion. In June 2025, total trade at $89.06 Billion was well below the previous 12-month average of $96.93 Billion.

TRADE GAP – EXPORT BOOSTERS AND IMPORT TRIMMERS

Here are star export performers in June 2025, on percentage increase in exports yoy. Electronic Goods (+46.9%), Tea (+32.6%), Jute (+23.4%), Meat / Dairy / Poultry (+19.7%), Cereals (+13.4%), and Drugs & Pharma (+6.0%) were the key export growth drivers in June 2025.  Major import trimmers in June 2025 were Pulses (-75.0%), Newsprint (-61.7%), Gold (-25.7%), Transport Equipment (-20.5%), and Coal/Coke/Briquettes (-19.1%).

TRADE DATA BREAK-UP FOR JUNE 2025

Here is a break up of the merchandise and services export and import data for June 2025, with comparable figures.

Data Source: DGFT and RBI

What is the big picture? For June 2025 the net deficit halved yoy to $(3.52) Billion; and also, lower than the May 2025 deficit. The services surplus has offset 81.3% of the merchandise trade deficit. The sharp fall in the overall deficit on the trade account was driven by a lower merchandise trade deficit and amplified by a higher services surplus.

CUMULATIVE TRADE DATA FOR FY26 (APR-JUN)

Having seen the monthly picture of June 2025, here is a cumulative picture of Q1FY26.

Data Source: DGFT and RBI (Trade data in Billion $)

The overall trade deficit, combining merchandise deficit and services surplus, at $(20.32) Billion; is 9.4% lower yoy. The current account deficit data for FY25 came in quite encouraging at just 0.6% of GDP for the full year, thanks to a strong trade surplus in the fourth quarter. That has been the pattern for the last two financial years. If that pattern continues, we could see another gratifying CAD performance in FY26 also.