India's Trade Deficit Widens to $30.43 Billion as Hormuz Disruptions Hit Exports

Post by : Saif

India's merchandise trade deficit widened sharply to $30.43 billion in June, as exports declined faster than imports due to shipping disruptions in the Strait of Hormuz and weaker global demand. The latest trade data highlights growing pressure on India's external trade amid continued geopolitical tensions in the Middle East.

According to official figures released by the Ministry of Commerce, merchandise exports fell to $40.41 billion in June, down from $45.2 billion in May. Imports also declined, dropping from $73.41 billion to $70.84 billion, but the fall in exports was steeper, leading to a wider trade gap.

Trade experts attributed the slowdown largely to disruptions in maritime shipping through the Strait of Hormuz following renewed tensions involving the United States and Iran. The strategic waterway remains one of the world's busiest energy and trade corridors, and recent security concerns have affected vessel movement and supply chains.

Export organisations have also pointed to weak demand from key international markets, particularly Europe and North America, as another major factor affecting India's overseas shipments.

Economists noted that higher commodity prices, especially crude oil, have increased India's import bill despite lower import volumes. Analysts believe rising energy costs could widen India's current account deficit if geopolitical tensions continue to impact global oil markets.

Despite the decline in merchandise exports, India's services sector remained resilient. Services exports stood at $33.03 billion, while imports were estimated at $17.92 billion, resulting in a healthy trade surplus of $15.11 billion.

Meanwhile, India continues negotiations with the United States on an interim trade agreement while also strengthening economic partnerships with countries including the United Kingdom and New Zealand. Policymakers hope expanding trade ties with multiple markets will reduce dependence on any single region and improve export resilience.

Experts believe stabilising shipping routes, improving global demand and securing new trade agreements will be crucial for narrowing India's trade deficit in the coming months.

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