India has vowed to increase its imports of industrial goods from the United States, following Prime Minister Narendra Modi’s recent visit to Washington. The announcement comes as official data reveals that India’s merchandise trade deficit stood at $22.99 billion in January, aligning with market expectations.
According to a Reuters poll, economists had projected a trade deficit of around $22.35 billion for January. The latest figures show that India’s merchandise exports for the month reached $36.43 billion, compared to $38.01 billion in December 2024. Meanwhile, imports stood at $59.42 billion, slightly lower than the previous month’s $59.95 billion.
Trade Secretary Sunil Barthwal highlighted that electronics goods led the surge in exports, followed by pharmaceuticals and rice. Additionally, services exports in January were estimated at $38.55 billion, while services imports were recorded at $18.22 billion.
Strengthening U.S.-India trade relations
Following Modi’s U.S. visit, both nations agreed to resolve long-standing tariff disputes and enhance trade cooperation. India also committed to increasing its purchases of American oil, gas, and military equipment.
Former U.S. President Donald Trump, in response to India’s tariffs on American goods, reiterated his stance on imposing reciprocal tariffs on countries that tax U.S. imports. India’s tariff rate, at an average of 12%, is significantly higher than the U.S. trade-weighted average tariff rate of 2.2%, as per World Trade Organization data. The U.S. currently holds a $45.6 billion trade deficit with India.
Senior Indian trade official Rajesh Agrawal stated that both countries have agreed to a “tough” timeline for negotiating the first phase of a trade deal. India aims to reduce tariffs in specific sectors while seeking concessions from the U.S. to facilitate smoother trade relations.
Decline in gold and crude oil imports
January’s trade data also revealed a drop in India’s gold and crude oil imports. Gold imports fell to $2.68 billion, a sharp decline from December’s $4.7 billion. Similarly, crude oil imports dropped to $13.4 billion, compared to $15.2 billion in the previous month.
This follows an incident in December when India’s trade ministry had to revise monthly import figures due to a miscalculation caused by double counting, particularly affecting imports of precious metals like gold.
