India’s trade deficit narrowed in June 2025, services sector showed strength, know

 

According to data released by the Indian government on Tuesday, the country’s trade deficit narrowed to $18.78 billion in June 2025. It was $21.88 billion in May. Economists polled by Reuters had forecast a trade deficit of $22.24 billion in June.

The data from the Ministry of Commerce and Industry shows that India’s exports remained almost stable in June at $35.14 billion, compared to $35.16 billion in June last year. At the same time, imports declined by 3.71 percent to $53.92 billion from $56 billion.

Meanwhile, trade in services performed well. In June, a surplus of $15.62 billion was recorded in services trade. Services exports were $32.84 billion, while imports were $17.58 billion. This figure reflects the strength of India’s services sector, which is an important part of the economy.

Trade with America increased, emphasis on FTA

India’s trade with the US also appeared to be positive. India’s exports to the US increased to $17.25 billion in April-May 2025, from $14.17 billion in the same period last year. This increase came after former US President Donald Trump threatened to increase tariffs. The Indian government is continuously trying to boost global trade. Recently, free trade agreements (FTAs) have been signed with the UK and the United Arab Emirates (UAE), which could be beneficial for Indian exporters. Discussions are also underway with the US regarding FTAs.

At the CII summit on Monday, Commerce Secretary Sunil Barthwal said that being competitive only in manufacturing will not work anymore. Referring to the India-UK FTA, he said that it includes a separate chapter on innovation, which will strengthen India’s innovation corridor. The government has set a target of $1 trillion in exports for FY26. India’s total exports in FY25 reached a record high of $824.9 billion, up 6.01 per cent from $778.1 billion last year.

To boost exports, the government is expanding the Production Linked Incentive (PLI) scheme to 14 sectors ranging from electronics to electric vehicle (EV) batteries. The aim is to reduce dependence on imports and strengthen India’s position in the global supply chain. Sector-specific and country-specific trade data for the month of June will be released by the Commerce Ministry later today.