India trade deficit hits eight-month high in July ahead of US tariff hikes

NEW DELHI: India’s merchandise trade deficit hit an eight-month high of over $27 billion in July as imports surged faster than exports ahead of US President Donald Trump’s tariff announcements on trading partners, including India

India’s July exports do not show any major fallout from the US decision to sharply raise tariffs on a range of Indian goods, as the higher levies only take effect from August.

In April-July, shipments to the US rose to $33.53 billion, up 21.64% year-on-year, from $27.57 billion a year ago, while imports from US rose to $17.41 billion compared to $15.50 billion a year ago, the government data released on Thursday showed.

Trump last week imposed an additional 25% tariff on Indian goods due to Delhi’s continued purchase of Russian oil, bringing the total levies on Indian exports to 50% - among the highest of any US trading partner. Import shipments to the United States may have peaked in July after retailers raced to bring in goods from China and elsewhere to avoid potentially hefty tariffs on holiday-related products, Reuters reported, citing logistics executives.

India’s goods exports rose to $37.24 billion in July, up from $35.14 billion in June, while imports rose to $64.59 billion, up from $53.92 billion in the previous month, the data showed.

The trade deficit stood at $27.35 billion in July, higher than economists’ expectations of $20.35 billion, and against $18.78 billion in the previous month.

The trade deficit hit a record $37.8 billion November 2024.

Despite global uncertainty, officials said merchandise and services exports had gone up in July, driven by engineering, electronics and jewellery among other products.