Trade Balance Increased by 21% in FY 2025

  • Despite global economic challenges, the country's exports of merchandise and services are estimated to have increased by 6% to reach $821 billion in FY 2025 while imports have increased by 7% to reach $915 billion. 
  • This resulted in widening of trade balance. 
  • Notably, in FY 2024, India had decreased its trade balance by ~36% but in FY 2025, trade balance increased by 21%.
  • Out of 30 key sectors, 20 sectors exhibited positive growth in Merchandise exports. 
  • Most notable among these sectors are Electronics goods exports which registered a growth of ~32.5%. 
  • On Merchandise import side, 8 sectors registered a negative growth. 
  • Most significant among these sectors being Pearls, precious & semi-precious stones at ~ -24% followed by Coal, Coke & briquettes; Project Goods; and Silver at ~-20%, ~ -19% & ~-11%
  • India's Top 5 export destinations along with their annual growth in FY 2025 include US (11.6%), UK (12%), Japan (21.1%), UAE (2.8%), France (11.4%) 
  • whereas Top 5 import sources in FY 2025 include UAE (32.0%), China (11.5%), Thailand (44.0%), USA (7.4%) & Russia (4.4%). 
  • FY 2025 observed quite a few challenges which affected global shipments movements including conflicts affecting key sea routes and infrastructural challenges such as drought in Panama Canal. 
  • Notably, Iron & Steel sector registered a decrease of 35% in exports due to global demand weakness.
  • Inflation has subdued over time
    • In FY 2025, inflation was mainly driven by higher food inflation ranging between 2.7% to 10.9% while the headline inflation rate remained between 3.3% to 6.2%. 
    • Sharp increase in Oct 2024 was due to unseasonal rains & adverse weather conditions which increased the vegetable & fruits prices by up to 36% & 7% respectively.
  • Output of 8 core industries has grown by just 4.4% in FY 2025
    • The index of eight Core Industries (ICI) measures combined & individual performance of eight core industries viz. Coal, Crude Oil, Natural gas, Petroleum & refinery products, Fertilizers, Steel, Cement and Electricity. 
    • For the period, FY 2025, growth rate in core sectors like Coal, Steel, Cement, & Electricity have exhibited substantial reduction in growth rate as against a negative growth in Natural Gas, Crude Oil & marginally lower growth in Refinery products & Fertilizers as compared with FY 2024. 
    • Overall, the output of 8 core industries have grown by 4.4% (provisional) in FY 2025 as against a 7.6% growth in FY 2024.
  • Healthy levels of Manufacturing & Services PMI in FY 2025
    • Throughout FY 2025, India’s manufacturing purchasing managers index (PMI) remained above 50, signaling continuous expanding output reaching at its maximum in a year at 58.8 in Apr 2024. 
    • While Services PMI observed continuous decline in over FY 2025 and touched its highest level at 62 in Apr 2024. 
    • The sector showed robust performance, particularly in the first half.

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