India's Export Scenario in February

India's exports have witnessed a downward trend for the fourth consecutive month, settling at USD 36.91 billion in February. This decline from USD 41.41 billion in the same month last year is attributed to the fluctuating petroleum prices and global uncertainties.

Trade Deficit Narrows

Despite the export downturn, India's trade deficit has significantly narrowed, with imports dropping to USD 50.96 billion from USD 60.92 billion in February 2024. This reduction has led to the lowest trade deficit since August 2021, standing at USD 14.05 billion for February 2025.

Analysis Behind the Import Drop

Preliminary estimates suggest that the sharp decline in imports is influenced by several factors, including petroleum price volatility, a high base effect from February 2024, and fluctuations in precious metals prices. Aditi Nayar, Chief Economist at ICRA Ltd, highlighted the significant reduction in imports of crude oil, gold, and silver as primary drivers behind the trade deficit compression.

Export Performance and Future Outlook

From April to February of the fiscal year, India's total merchandise and services exports have seen a 6.24% year-on-year increase, reaching USD 750.53 billion. The export sector has shown resilience, with positive growth in key markets such as the US, UAE, UK, Japan, and the Netherlands during April-February 2024-25.