Goods Exports Up 7 PC On Frontloading; Trade Deficit At 8 Month-High

After registering decline for two months, goods exports in July posted growth of 7.29 per cent to $37.24 billion as several US-focussed sectors like engineering goods, electronics, gems and jewellery, pharma and chemicals, expedited their shipments. The hurried shipments resulted in a 19.94 per cent growth in exports to the US in July.

“The growth in July was supported by the continued surge in exports to the US that has been witnessed since the beginning of 2025, although growth in exports to the other geographies also turned positive after a gap of two months,” said Aditi Nayar, chief economist, ICRA.

However, the imports registered a higher growth of 8.6 per cent to $64.59 billion. This led to an eight month-high trade deficit of $27.35 billion which widened from $18.78 billion in June and $23.5 billion in July 2024. According to ICRA, the July trade deficit was much higher than the average of $22.4 billion/month in Q1 FY26 and FY25.

The government said that it will fast track free trade agreements and conduct review of existing trade agreements. It wants to strengthen the export promotion scheme for diversification of destinations by mobilising missions in top 50 markets.

Cumulative merchandise exports during April-July 2025 grew 3 per cent to $149.20 billion and total exports - merchandise and services together- during April-July grew 5.23 per cent to $277.63 billion.

Services grew by a marginal 1.4 per cent in July to $31.03 billion and imports declined by 3.38 per cent to $15.40 billion. In the April-July period, service exports recorded 7.8 per cent growth. The services trade surplus for April-July 2025 was higher at $63.53 billion as compared to $54.34 billion in April-July 2024.