India’s Q1 Trade Deficit Shrinks 9.4% Amid Services Export Surge

fast Summary

• India’s overall trade deficit contracted by 9.4% in Q1 of FY 2025-26, reaching $20.3 billion.
• Services exports grew nearly 11% to $98.1 billion compared to $88.5 billion in the same quarter last year.
• Overall exports increased by about 6%, totaling $210.3 billion versus $198.5 billion last year.
• Merchandise exports rose marginally (2%) to $112.2 billion; non-petroleum merchandise exports saw a healthy growth of 6%.
• Total imports grew by 4.4%, reaching $230.6 billion; merchandise and services imports expanded at rates of 4.2% and 4.9%, respectively.
• Commerce Secretary Sunil Barthwal stated potential for surpassing record export levels from FY 2024-25, citing positive performance across services and merchandise sectors despite global challenges.

Indian opinion Analysis

India’s trade figures for Q1 reflect resilience amidst fluctuating global economic trends, with the contraction in trade deficit largely driven by robust growth in services exports (+11%). The steady expansion of non-petroleum merchandise exports (+6%) further underscores India’s diversification efforts away from commodity dependence.

Though, slower growth in overall merchandise exports (+2%), attributed to declining petroleum prices globally, highlights vulnerability where hydrocarbons still play a meaningful role within trade dynamics despite broader progress.

The uptick in total imports signals rising domestic demand but concurrently raises concerns for maintaining balanced external accounts over time if import dependency continues increasing alongside export progress.

Commerce Secretary Sunil Barthwal’s optimism regarding achieving all-time high export records should be viewed with caution yet encouragement-it demonstrates confidence backed by encouraging data but remains accountable against ongoing geopolitical uncertainties that could affect future projections.

Read more: Source Link