India’s trade deficit has reached a new record high amid mounting pressure from increased U.S. tariffs, raising concerns over further strain on the country’s economy.
According to official data, India’s goods trade deficit in July climbed to USD 27.35 billion — the highest in eight months. Experts say the deficit widened as imports surged ahead of U.S. tariff hikes, outpacing the growth in exports.
Between April and July, India’s exports to the United States rose from USD 27.57 billion to USD 33.53 billion. However, imports jumped significantly to USD 64.59 billion, far higher than June’s USD 53.92 billion.
In July alone, India’s exports reached USD 37.24 billion, slightly up from USD 35.14 billion in June. This deficit was far above economists’ forecasts of USD 20.35 billion.
The impact of an additional 25% tariff imposed by the U.S. on Indian goods — in response to India’s continued purchase of oil from Russia — has affected exports to the American market. Currently, the U.S. tariff rate on Indian exports stands at 50%, significantly higher than that for other trading partners.
Wholesale price index data shows that in July, prices of goods in India fell by 0.58% compared to a year earlier, mainly due to a drop in food prices. Notably, vegetable prices were down 28.96% year-on-year. In contrast, manufactured goods prices rose 2.05%, while fuel and electricity prices fell by 2.43%.
A Reuters survey had forecast a 0.3% year-on-year decline in the wholesale price index for July.