Indian Exports Drop 10.9% in February, Hitting 20-Month Low

New Delhi: India’s merchandise trade deficit fell to $14.05 billion in February, marking a three-and-a-half-year low, as exports and imports contracted sharply last month.

The decline can be attributed to falling global petroleum prices and US President Donald Trump’s disruptive reciprocal tariff announcements, the Business Standard reported.

The trade deficit – the gap between imports and exports – stood at $19.52 billion in February 2024. According to data released by the Commerce Department on Monday, outbound shipments from India declined at the fastest rate in 20 months, falling 10.9% year-on-year to $36.91 billion in February. The fall can be attributed to a high base of $41.4 billion in the same period a year ago, officials quoted by the paper said.

Imports fell by 16.3% to $50.96 billion due to a 29.6% fall in oil imports at $11.9 billion. This was followed by a 62% decline in gold imports which dropped to $2.3 billion. Overall, these contributed to the sharpest decline in imports in 20 months and the first drop in 11 months, the paper reported.

In the same period, China’s exports rose 7.1% and Vietnam’s outbound shipments increased by 8.4%, highlighting India’s export contraction among emerging market economies.

India’s exports are under threat of reciprocal tariffs from the US which are to come into effect on April 2. The US has already levied a 25% duty on steel and aluminium imports. The tariffs are also expected to negatively impact India’s pharmaceutical exports, forcing many smaller players to either incur losses or face pressure to consolidate.

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