India's Trade Deficit Narrows Sharply Amidst Export Surge and Import Contraction
UPSC Relevance
Prelims: Indian Economy (External Sector - Balance of Payments, Balance of Trade, Trade Deficit, Major Exports/Imports).
Mains:
General Studies Paper 3 (Economy): Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Foreign trade is a crucial indicator of the economy's health and stability.
Key Highlights from the News
India's trade deficit decreased by over 54% to $9.9 billion in August 2025.
This was mainly due to three reasons:
6.7% increase in merchandise exports.
Continued strong performance in services exports.
10.1% decrease in merchandise imports.
Notably, India's exports to the US increased in August despite US tariffs.
The total trade deficit for the first five months of the financial year (April-August) also decreased by 20.1% compared to last year.
These figures indicate the resilience of the Indian export sector amidst global economic uncertainties.
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