India is entering new phase in global trade, says Piyush Goyal

Union Minister Piyush Goyal on Tuesday said India’s overall economic fundamentals remain strong, with exports holding steady and multiple factors supporting the country’s external position.

Speaking in the Lok Sabha, the minister also said India is entering a new phase in international trade, which will help expand its global footprint and bring long-term economic benefits.

“While services exports continue to grow consistently every month, merchandise exports have remained flat till February, which means they have not declined,” he said.

In March, there was some weakness in the first week, but exports turned positive in the second week and are expected to stabilise by the end of the month, he added.

Highlighting the broader external sector, Goyal said the current account deficit comprises several components, including the goods trade deficit and the services trade surplus. He noted that the services surplus remains significant and helps offset the merchandise trade gap.

He also pointed out that India receives large remittance inflows and continues to attract strong foreign direct investment (FDI), with the country setting new records year after year.

“Overall, India’s economic situation and fundamentals are very strong. There is growing enthusiasm across the world to expand trade relations with India,” the minister said. Goyal added that in the past few years, India has expanded trade engagement with several developed nations, creating new opportunities for exporters.

He also stressed that earlier free trade agreements (FTAs) were often signed with competing economies, which posed challenges for domestic industries.

He said the government is now pursuing balanced trade agreements that will benefit Indian exporters, farmers, fishermen, and micro, small and medium enterprises (MSMEs).

Referring to the proposed trade pact with the United Kingdom, Goyal said efforts are on to operationalise it soon, possibly as early as next month.

“As these agreements become operational, they will open new markets for Indian products and services, creating vast opportunities for exporters,” he said.

Meanwhile 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.

Reuters