India’s June Trade Deficit Hits Five-Month High

Imports grew more than 30 percent year-on-year, boosted by higher shipments of crude oil, gold, electronics and fertilisers. Crude and petroleum product imports rose by over 40 percent, contributing significantly to the higher import bill. Fertiliser imports also jumped sharply, reflecting strong domestic demand and elevated global prices.

In contrast, merchandise exports rose in year-on-year terms but were outpaced by imports, with key sectors such as engineering goods and electronics providing support. Sequentially, exports fell compared with May, adding pressure on the trade balance.      Analysts noted that shipping disruptions in the Strait of Hormuz, linked to ongoing conflict in West Asia, weighed on export performance and overall trade flows during June. The wider trade deficit has raised concerns about potential stress on India’s current account balance in the ongoing fiscal year, especially if commodity prices and import demand stay elevated. Economists had expected a smaller deficit for June, indicating that external sector pressures turned out stronger than earlier forecasts.