India’s Trade Performance in August 2025: Exports Up, Imports Down, Deficit Narrows

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16 Sep, 2025

India’s Trade Performance in August 2025: Exports Up, Imports Down, Deficit Narrows

In August 2025, India’s foreign trade showed a significant turnaround as merchandise exports rose by 6.7% year-on-year to $35.1 billion, while imports dropped sharply by 10.12% to $61.59 billion. This resulted in a narrowed trade deficit of $26.49 billion, compared to $35.64 billion in August 2024. The performance marks a notable development amid global economic uncertainties and domestic policy adjustments.

This growth in exports occurred despite challenges like high global inflation and slowing global demand, particularly from key markets. Meanwhile, lower imports, especially in gold, contributed to improving India’s external account position.

Key Data Points

✅ Exports: $35.1 billion (6.7% YoY growth)
✅ Imports: $61.59 billion (10.12% YoY decline)
✅ Trade Deficit: $26.49 billion (narrowed from $35.64 billion in August 2024)
✅ Gold Imports: $5.43 billion (56% YoY decline)
✅ Top Export Destinations:
- USA ($6.86 billion)
- UAE ($3.24 billion)
- Netherlands ($1.83 billion)
- China ($1.21 billion)
- UK ($1.14 billion)
✅ Top Import Sources:
- China ($10.91 billion)
- Russia ($4.83 billion)
- UAE ($4.66 billion)
- USA ($3.6 billion)
- Saudi Arabia ($2.5 billion)

Sectoral Insights

Export Growth Driven By:
- Engineering goods ($9.9 billion)
- Electronic goods ($2.93 billion)
- Petroleum products ($4.48 billion)
- Drugs and pharmaceuticals ($2.51 billion)
- Gems & Jewellery ($2.31 billion)

Import Decline Led By:
- Gold imports (major drop by 56% due to lower consumer demand and high domestic prices)
- Petroleum products ($13.26 billion)
- Electronic goods ($9.73 billion)
- Vegetable oils, coal, chemicals, and fertilisers

What Does This Mean for the Indian Market?

✅ Stronger External Sector Position
A narrowing trade deficit reduces the burden on the current account and foreign exchange reserves, contributing to more stability in the Indian rupee.
✅ Investor Confidence Boost
Positive export growth amidst a global slowdown signals resilience in India’s export sectors, which may improve market sentiment and lead to inflows in equity and export-oriented stocks.
✅ Sector-Specific Impact
- Export-driven industries (e.g., engineering, pharmaceuticals) are likely to gain investor attention.
- Reduced gold imports may signal weakening consumer demand, possibly affecting gold stocks and associated sectors.
✅ Policy Implications
The government may continue to push for reforms supporting exports while maintaining checks on unnecessary imports, ensuring trade sustainability and economic stability.

This analysis reflects how India’s trade dynamics are shifting in a complex global environment, signaling cautious optimism for the market.

By Nehal Taparia

This content is for educational and knowledge purposes only and should not be considered as investment or Trading advice. Please consult a certified financial advisor before making any investment or Trading decisions.

Our Recent FAQS

Frequently Asked Question &
Answers Here

Q1: Why did India’s exports grow despite global uncertainties?

Strong demand for engineering goods, pharmaceuticals, and petroleum products, combined with effective government export promotion measures, supported the growth

Q2: What caused the sharp decline in imports, especially gold?

Gold imports fell by 56% due to reduced domestic demand amid high local prices and tightening of import norms to manage the trade deficit.

Q3: How does the narrower trade deficit impact India’s economy?

A lower trade deficit eases pressure on the currency and foreign exchange reserves, reducing volatility and providing more room for economic policies.

Q4: Which sectors will benefit the most from this trend?

• Export sectors: Engineering goods, pharmaceuticals, and petroleum products will see positive market momentum. • Sectors relying heavily on imports, like gold and electronics, may face challenges.

Q5: What are the potential risks ahead?

Global demand slowdown, trade restrictions, and geopolitical tensions remain key risks that could affect future export and import dynamics.