India’s Trade Deficit Widens to $21.54 bn in March 2025: Govt Data
India’s merchandise trade deficit has widened to $21.54 billion in March 2025, from $14.05 billion in February 2025, as global trade faces volatility due to US tariffs, according to government data. This significant increase in the trade deficit has raised concerns about the country’s trade performance and its impact on the overall economy.
According to the data released by the government, the nation’s merchandise exports in the fiscal year 2025 (FY25) stood at $437.42 billion, a marginal increase from $437.07 billion in FY24. However, the merchandise exports in March 2025 stood at $41.97 billion, while imports reached $64.51 billion, resulting in a significant trade deficit.
The widening trade deficit is attributed to the country’s increasing dependence on imports to meet its domestic demand, particularly in the wake of the ongoing global pandemic. The pandemic has disrupted global supply chains, leading to a shortage of essential goods and services, and India has been no exception. As a result, the country has had to rely heavily on imports to meet its domestic demand, leading to a significant increase in the trade deficit.
Another major factor contributing to the widening trade deficit is the impact of US tariffs on Indian exports. The US has imposed tariffs on various Indian products, including steel and aluminum, which has resulted in a decline in India’s exports to the US. This has led to a significant reduction in India’s merchandise exports, further exacerbating the trade deficit.
The widening trade deficit has raised concerns about the country’s trade performance and its impact on the overall economy. The trade deficit is a major concern for policymakers, as it can lead to a decline in the country’s foreign exchange reserves and an increase in the cost of living for consumers.
The widening trade deficit is also a major challenge for the country’s exporters, who are facing stiff competition from other countries. The decline in India’s exports to the US has led to a significant decline in the country’s merchandise exports, which has resulted in a decline in the country’s overall exports.
The government has taken several steps to address the widening trade deficit, including increasing the import duty on various goods and services. The government has also taken steps to promote exports, including offering incentives to exporters and increasing the availability of credit to exporters.
In conclusion, the widening trade deficit is a major concern for India, and it requires immediate attention from policymakers. The trade deficit is a major challenge for the country’s exporters, and it can lead to a decline in the country’s foreign exchange reserves and an increase in the cost of living for consumers.
