With high exports but soaring imports, electronics remained at the centre among other goods as India’s trade deficit widened. US tariffs and global tensions continue to loom large.
India’s merchandise trade deficit climbed to an eight-month high of $27.35 billion in July, as imports outpaced exports on the back of strong demand for petroleum and electronic goods. Provisional data from the Commerce Ministry showed exports rose but were overshadowed by a sharper surge in imports.
Merchandise exports increased to $37.24 billion in July, up from $35.14 billion a month earlier. Imports, however, jumped to $64.59 billion from $53.92 billion, widening the gap. In November 2024, the deficit had reached its peak at $32.8 billion.
According to a report by Mint, electronics were among the fastest-growing categories. Commerce Secretary Sunil Barthwal said electronic goods, engineering products, pharmaceuticals, and chemicals drove export growth.
Shipments of electronic goods during April–July rose to $16.17 billion from $11.25 billion a year earlier, marking one of the strongest expansions among product groups. Engineering exports grew to $39.33 billion, while pharmaceuticals climbed to $10.25 billion.
Electronics were also a major driver of imports alongside petroleum and machinery, underlining India’s dependence on high-tech components from overseas. China, the UAE, Russia, the US, and Saudi Arabia remained top suppliers.
The broader trade picture remained mixed. Services exports stood at $31.03 billion in July, slightly below June’s $32.84 billion, while imports in the segment fell to $15.40 billion. Overall, goods and services exports reached $68.27 billion, compared to imports of $79.99 billion, resulting in a total trade deficit of $11.72 billion.
Geopolitical risks added uncertainty. Earlier this month, US President Donald Trump announced an additional 25% tariff on Indian goods, raising the levy to 50% from late August. Nearly half of India’s exports to the US, covering labour-intensive sectors, could be affected. Exports to the US account for about 2% of India’s GDP.
Despite these headwinds, officials remain upbeat.
The Export-Import Bank of India projects merchandise exports of $108.1 billion in the September quarter, though rising electronics demand and higher energy prices are expected to keep imports elevated. With the Strait of Hormuz facing disruptions, supply-chain risks remain high.
Electronics, both as a key export and a major import, continue to shape India’s trade dynamics.
