India’s Trade Deficit : Recently, India’s trade performance showed marked improvement as the overall trade deficit narrowed to $6.6 billion in May 2025, reflecting a sharp 30% drop compared to the same month last year.
o This was driven by a decline in oil import costs and a strong surge in services exports, according to data from the Ministry of Commerce and Industry.
o Covers both goods (physical products like machinery, oil, etc.) and services (such as tourism, IT services, banking, etc.), making it a comprehensive measure of external trade imbalance.
o Formula : Trade Deficit = Total Imports − Total Exports (If the result is positive, it indicates a trade deficit; if negative, it suggests a trade surplus)
o India’s total merchandise imports declined by 1.7%, reflecting the reduced burden of crude oil prices.
o Services imports also edged up by 1.5%, indicating a steady demand for cross-border services.
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