India's July trade deficit hits 8-month high at $27.35 bn

Exports hold up before US tariffs take effect, imports surge on demand for oil, electronics

- Dhirendra Kumar & Rhik Kundu

India's merchandise trade deficit widened to an eight-month high of $27.35 billion in July, as imports surged faster than exports, according to provisional data from the commerce ministry. Exports held up ahead of US tariffs set to take effect in late August, while imports surged, driven by higher demand for petroleum and crude products, electronic goods, and machinery.

In November 2024, India's trade deficit stood at $32.8 billion. Economists polled by Reuters had expected a deficit of $20.35 billion for July.

Earlier this month, President Donald Trump announced an additional 25% tariff on Indian goods over New Delhi's trade with Russia, bringing total levies on Indian exports to 50% from August, among the highest of any US trading partner. The new duties are expected to kick in by 27 August, unless a breakthrough is reached during the ongoing 21-day negotiation window.