India’s merchandise trade deficit jumped to USD 21.5 bn in Mar-25 from USD 14.1 bn in Feb-25
Download ReportQuantEco Research || Mar-25 Merchandise Trade - The lull before the great disruption
India’s merchandise trade deficit for the full financial year 2024-25 widened to USD 283 bn from USD 241 bn in FY24. Petroleum products and gems & jewellery items explain the widening of trade deficit in Mar-25 as well as FY25. For FY26, global geopolitics and geoeconomics will determine the course of India’s external trade. Prices of crude oil and precious metals have shown divergent behaviour in recent months. More importantly, with the US administration driving a dramatic reset in global trade through discriminatory use of tariffs, the dynamics could alter significantly for India. While there would be an adverse direct impact of higher tariffs, a relatively higher rate of tariff on some of the key competitors could allow India to potentially benefit from trade diversion. Having said, the uncertainty with respect to US tariffs is extremely high, esp. considering the ambiguous announcements, suspension, exemptions, and reclassification of various products. We retain our FY26 current account deficit forecast of 0.8% of GDP (USD 33 bn) for now.