India’s June Trade Deficit Hits Five-Month High

India’s merchandise trade deficit widened to a five-month high of 30.43 billion dollars in June, driven by faster import growth compared to exports. The gap rose from 28.21 billion dollars in May and was sharply higher than 19.10 billion dollars recorded in June last year. According to official data, total goods imports reached about 70.84 billion dollars, while exports stood at around 40.41 billion dollars for the month.

Imports Surge On Oil, Gold, Fertilisers

Imports grew more than 30 percent year-on-year, boosted by higher shipments of crude oil, gold, electronics and fertilisers. Crude and petroleum product imports rose by over 40 percent, contributing significantly to the higher import bill. Fertiliser imports also jumped sharply, reflecting strong domestic demand and elevated global prices.

In contrast, merchandise exports rose in year-on-year terms but were outpaced by imports, with key sectors such as engineering goods and electronics providing support. Sequentially, exports fell compared with May, adding pressure on the trade balance.

Shipping Disruptions And External Account Concerns

Analysts noted that shipping disruptions in the Strait of Hormuz, linked to ongoing conflict in West Asia, weighed on export performance and overall trade flows during June. The wider trade deficit has raised concerns about potential stress on India’s current account balance in the ongoing fiscal year, especially if commodity prices and import demand stay elevated. Economists had expected a smaller deficit for June, indicating that external sector pressures turned out stronger than earlier forecasts.