India’s Trade Balance Sees Surprising Turnaround: February Deficit Plunges to 3-Year Low of $14.05 Billion
India’s Merchandise Trade Deficit Narrowed to 3-Year Low in February
New Delhi, March 17: India’s merchandise trade deficit reduced significantly in February, reaching its lowest point in over three years, according to the latest data released by the Ministry of Commerce and Industry. The deficit stood at $14.05 billion, a substantial decrease from $22.99 billion in January, driven by a steep decline in imports and a steady level of exports.
Exports remained flat, reaching $36.91 billion in February, while imports fell by 16.3 per cent to $50.96 billion compared to $59.42 billion in the previous month. The trade deficit is currently at its lowest since August 2021, as highlighted by L Satya Srinivas, Additional Secretary at the Ministry of Commerce and Industry. For the 11-month period, the country’s trade deficit stood at $261.05 billion.
In the services sector, exports were recorded at $35.03 billion, a 9.1 per cent decrease from January, while imports similarly declined to $16.55 billion. Notably, gold imports for the financial year so far totaled $53.53 billion, while oil imports stood at $166.73 billion. Non-oil exports were recorded at $337.01 billion, with major contributors including electronic goods, engineering goods, drugs and pharmaceuticals, rice, and gems and jewellery.
India’s electronic goods exports, particularly smartphones, have been gaining momentum, driven in part by the government’s Production Linked Incentive (PLI) Scheme. This initiative has attracted foreign tech giants, such as Apple and its suppliers, to set up alternative supply chains outside China following US sanctions. As a result, India’s electronics goods exports have accelerated, meeting 99 per cent of domestic demand and reducing imports. According to the India Cellular and Electronics Association, smartphone exports have already exceeded estimates, reaching $21 billion in the 11-month period of 2024-25, with a 54 per cent year-on-year growth over the same period in 2023-24.
Minister of Electronics and Information Technology, Ashwini Vaishnaw, expects smartphone exports to reach $20 billion (Rs 1.68 lakh crore) during 2024-25, a feat that has already been achieved in the current financial year. The significant decline in imports and steady exports have resulted in a smaller trade deficit, providing a positive outlook for India’s economy. With the PLI Scheme continuing to attract foreign investment and boost domestic production, India is poised to maintain its growth momentum in the electronics sector.
Original Source: https://theshillongtimes.com/2025/03/17/indias-trade-deficit-dips-to-3-year-low-of-14-05-billion-in-february/
Category : Economy,NATIONAL,News Alert
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Publish Date: 2025-03-17 17:49:00
