Mar-25 trade deficit widens to $21.54 Billion, as crude, gold imports spike

17 Apr 2025 , 10:53 AM

INDIA MARCH 2025 TRADE – DATA CHECK

For March 2025, merchandise trade deficit widened sharply to $21.54 Billion as exports rose, but imports spiked faster. This could be partially due to bunching of imports ahead of the new tariff regime. Gold imports nearly doubled over February to $4.48 Billion, while crude oil imports spiked 60% over February to $19.01 Billion in March 2025.

Key contributors to exports in March 2025 were Engineering Goods $10.82 Billion (-3.9%), Petroleum Products $4.90 Billion (-9.5%), Electronic Goods $4.56 Billion (+29.6%), Drugs & Pharmaceuticals $3.68 Billion (+31.2%), Gems & Jewellery $2.90 Billion (+10.6%), and Organic & Inorganic Chemicals $2.87 Billion (-24.5%). Key import contributors were crude & petroleum products $19.01 Billion (+16.31%), Electronic Goods $9.43 Billion (+25.1%), Machinery $4.65 Billion (+12.1%), Gold $4.48 Billion (+192.1%), Transport Equipment $2.55 Billion (-25.5%), and Chemicals $2.26 Billion (+6.4%).

Top export destinations for March 2025 were United States $10.15 Billion, United Arab Emirates (UAE) $3.40 Billion, the Netherlands $1.79 Billion, China $1.51 Billion, and UK $1.38 Billion. Top import originating nations for March 2025 were China $9.68 Billion, UAE $7.68 Billion, Russia $5.51 Billion, United States $3.70 Billion, Saudi Arabia $3.29 Billion, Iraq $2.75 Billion, and Hong Kong $2.08 Billion.

HOW MERCHANDISE TRADE EVOLVED IN LAST 1 YEAR

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

Monthly Data	Exports ($ Billion)	Imports ($ Billion)	Total Trade ($ Billion)	Trade Deficit ($ Billion)
Mar-24	41.68	57.28	98.96	-15.60
Apr-24	34.99	54.09	89.08	-19.10
May-24	38.13	61.91	100.04	-23.78
Jun-24	35.20	56.18	91.38	-20.98
Jul-24	33.98	57.48	91.46	-23.50
Aug-24	34.71	64.36	99.07	-29.65
Sep-24	34.58	55.36	89.94	-20.78
Oct-24	39.20	66.34	105.54	-27.14
Nov-24 #	32.03	63.86	95.89	-31.83
Dec-24	38.01	59.95	97.96	-21.94
Jan-25	36.43	59.42	95.85	-22.99
Feb-25	36.91	50.96	87.87	-14.05
Mar-25	41.97	63.51	105.48	-21.54

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 $36.32 Billion, while average merchandise imports stood at $58.93 Billion. For March 2025 exports and imports are well above 1-year averages. The average trade deficit in last 12 months stood at $(22.61) Billion; with the March 2025 trade deficit marginally lower at $(21.54) Billion. In March 2025, total trade at $105.48 Billion was above the previous 12-month average of $95.25 Billion.

TRADE GAP – EXPORT BOOSTERS AND IMPORT TRIMMERS

Here are star export performers in March 2025, on percentage increase in exports yoy. Coffee (+39.2%), Drugs & Pharmaceuticals (+31.2%), Electronic Goods (+29.6%), Marine Products (+28.6%), Jute (+21.7%), Meat/Dairy/Poultry (+16.6%), Tobacco (+14.0%), Tea (+11.3%), and Gems & Jewellery (+12.6%) were the key export growth drivers in March 2025.  Major import trimmers in March 2025 were Project Goods (-87.3%), Silver (-85.4%), Coke/Coal/Briquettes (-30.2%), Transport Equipment (-25.5%), and Pulses (-23.5%).

TRADE DATA BREAK-UP FOR MARCH 2025

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

Macro Variables (Trade Related)	Mar-25 ($ Billion)	Feb-25 ($ Billion)	Mar-24 ($ Billion)	Change YOY (%)
Merchandise Exports	41.97	36.91	41.69	0.67%
Merchandise Imports	63.51	50.96	57.03	11.36%
Total Merchandise Trade	105.48	87.87	98.72	6.85%
Merchandise Trade Deficit	-21.54	-14.05	-15.34	40.42%
Services Exports	31.64	35.03	30.01	5.43%
Services Imports	13.73	16.55	16.60	-17.29%
Total Services Trade	45.37	51.58	46.61	-2.66%
Services Trade Surplus	17.91	18.48	13.41	33.56%
Combined Exports	73.61	71.94	71.70	2.66%
Combined  Imports	77.24	67.51	73.63	4.90%
Overall Trade Volume	150.85	139.45	145.33	3.80%
Overall Trade Deficit	-3.63	4.43	-1.93	88.08%

Data Source: DGFT and RBI

What is the big picture? For March 2025, it is a net deficit, compared to a surplus in February 2025. However, the services surplus has offset more than 83% of the merchandise trade deficit. The controlled net deficit in the last two months will help keep the current account deficit (CAD) for FY25 in check. However, on a yoy basis, the merchandise trade deficit expanded at 40.4%, while services surplus expanded at just 33.6%.

CUMULATIVE TRADE DATA FOR FY25 (APR-MAR)

Having seen the monthly picture of March 2025, here is a cumulative picture of 12 months of FY25.

Macro Variables (Year-to-Date)	FY25 (Apr-Mar)	FY25 (Apr-Feb)	FY24 (Apr-Mar)	Change YOY (%)
Merchandise Exports	437.42	395.63	437.07	0.08%
Merchandise Imports	720.24	656.68	678.21	6.20%
Total Merchandise Trade	1,157.66	1,052.31	1,115.28	3.80%
Merchandise Trade Deficit	-282.82	-261.05	-241.14	17.28%
Services Exports	383.51	354.90	341.06	12.45%
Services Imports	194.95	183.21	178.31	9.33%
Total Services Trade	578.46	538.11	519.37	11.38%
Services Trade Surplus	188.56	171.69	162.75	15.86%
Combined Exports	820.93	750.53	778.13	5.50%
Combined  Imports	915.19	839.89	856.52	6.85%
Overall Trade Volume	1,736.12	1,590.42	1,634.65	6.21%
Overall Trade Deficit	-94.26	-89.36	-78.39	20.24%

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

The overall trade deficit, combining merchandise deficit and services surplus, at $(94.26) Billion; is 20.2% higher yoy. This can be attributed to the trade uncertainty surrounding Trump’s aggressive reciprocal tariff policy. However, the good news is that in FY25, India has scaled past $1 Trillion in total goods Trade and $1.7 Trillion in overall trade.

PARTING THOUGHTS ON CAD PROJECTIONS FOR FY25

The current account deficit (CAD) for the first 9 months of FY25 stands at 1.3% of GDP, which is more due to the sharp upward revision of Q2 CAD to 1.8% of GDP. Based on the Q4 data, it looks India may close FY25 with current account deficit (CAD) in the ratio of 1.2% to 1.3% of GDP, belying concerns of overshooting the target. For the final data on full year CAD, we have to now wait till the end of June 2025.