India’s merchandise trade deficit narrows to $27.1 billion in February

India’s merchandise trade deficit narrowed to $27.1 billion in February from $34.68 billion in the previous month, according to data released by the Ministry of Commerce and Industry on Monday.

The country’s merchandise exports rose to $36.61 billion from $36.56 billion in January, while imports fell to $63.71 billion from $71.24 billion, the figures showed.

India’s merchandise exports stood at $402.93 billion for April-February 2025-26, up from $395.66 billion in the same period last year, which represents a 1.84 per cent increase, according to official data.

The data comes against the backdrop of the escalation in the Iran war, which broke out on February 28, leading to a choking of the Strait of Hormuz in the Middle East through which 20 per cent of the world’s oil and gas exports transit.

The blocking of the Strait has also hit India’s exports of commodities such as rice to the Middle East countries.

Earlier, around 50 per cent of India’s energy imports came through the Strait of Hormuz, but these have now been diversified, with a big chunk coming from Russia.

India’s strategic oil reserves and diversification of energy imports across 40 supplier countries have transformed the country’s capacity to absorb global energy shocks. This resilience has ensured that there is no energy crisis in India due to the disruption caused by the Iran war, as the government is tackling the situation with supply-side management, a senior official said.

India is also in direct touch with Iran to allow its merchant ships to sail through Hormuz. Indian-flag vessel Jag Laadki sailed safely from the UAE’s Fujairah port on Sunday, carrying about 80,800 metric tonnes of Murban crude oil and is bound for India. The vessel and all Indian seafarers onboard are safe, according to a statement issued by the Ministry of Shipping and Ports.

All Indian seafarers in the region are safe, and no shipping incident involving Indian seafarers has been reported in the past 24 hours, the statement said.

Two Indian-flag LPG carriers, Shivalik and Nanda Devi, carrying about 92,712 MT of LPG, which had crossed the Strait of Hormuz on Saturday, are currently on passage to India and are scheduled to reach Mundra Port on Monday and Kandla Port on Tuesday, respectively.

At present, 22 Indian-flagged vessels with 611 seafarers remain west of the Persian Gulf region.

India has robust macroeconomic fundamentals with ample forex reserves to cover 11-12 months of imports. These are also enough to cover the country’s oil import bills for 5 years. The strategic stocks of crude and petroleum products are sufficient to cover more than 70 days of market demand, while imports have been diversified to reduce the country’s dependence on the Middle East, the official pointed out.

Meanwhile India’s total exports (merchandise and services) registered 11.05 per cent year-on-year growth at $76.13 billion for February, as cumulative exports during the April-February 2025-26 period is estimated at $790.86 billion − compared to $747.58 billion in April-February 2024-25, with an estimated growth of 5.79 per cent, the Ministry of Commerce and Industry data showed on Monday.

Merchandise exports during February were $36.61 billion as compared to $36.91 billion in February 2025, while for the April-February 2025-26 period, Merchandise exports reached $402.93 billion as compared to $395.66 billion during April-February 2024-25, registering a positive growth of 1.84 per cent.

The estimated value of services export for February is $39.53 billion as compared to $31.65 billion in February 2025, while for the April-February 2025-26 period, it is estimated at $387.93 billion, against $351.93 billion in April-February 2024-25, the ministry data showed. Major drivers of merchandise exports growth in February include Engineering Goods, Electronic Goods, Organic & Inorganic Chemicals, Gems & Jewellery and Meat, Dairy and Poultry Products.

Engineering Goods exports increased by 12.90 per cent from $9.17 billion in February 2025 to $10.36 billion last month. Electronic Goods exports increased by 10.37 per cent, from $3.79 billion in February 2025 to $4.18 billion last month.

Organic and inorganic chemicals exports increased by 6.85 per cent from $2.23 billion in February 2025 to $2.38 billion last month. Gems and jewellery exports increased by 4.08 per cent from $2.53 billion in February 2025 to $2.64 billion in February 2026. Meat, Dairy and Poultry Products exports increased by 22.66 per cent from $0.45 billion to $0.55 billion last month, according to the data.

Merchandise imports during April-February 2025-26 were $713.53 billion as compared to $657.46 billion during April-February 2024-25. Merchandise trade deficit during April-February 2025-26 was $310.60 billion as compared to $261.80 billion during April-February 2024-25.

The Commerce Ministry data further showed that the estimated value of service imports during April-February 2025-26 is $186.98 billion as compared to $181.23 billion in April-February 2024-25.

Reuters