India's Trade Gap Widens as Imports Surge Amidst Export Growth

India's trade deficit expanded to $6.92 billion in December 2025, driven by rising imports outpacing exports, according to the Commerce Ministry. Merchandise trade saw a modest export rise, while services export dropped. A Production Linked Incentive scheme boosted sectors like electronics, enhancing global competitiveness and integrating India into the supply chain.

India has witnessed a noticeable widening in its trade deficit, which reached USD 6.92 billion in December 2025, a stark contrast to the previous year's USD 1.46 billion, revealed recent figures from the Ministry of Commerce and Industry. This development is chiefly attributed to a significant rise in imports amidst relatively steady exports.

While overall merchandise trade saw a modest gain, with exports slightly climbing to USD 38.51 billion from USD 37.80 billion in December 2024, imports surged, escalating sharply to USD 63.55 billion compared to the prior year's USD 58.43 billion. In the realm of services, the scenario was slightly dampened with exports moderating to USD 35.50 billion, a dip from USD 36.97 billion. However, services imports diminished marginally to USD 17.38 billion from USD 17.80 billion.

The government has strategically implemented a Production Linked Incentive (PLI) scheme targeting diverse sectors, including electronics, as a blueprint to bolster Indian manufacturers' global competitiveness, lure investments, and beef up exports. This initiative is recognized for fostering promising export growth in sectors such as electronics, pharmaceuticals, and engineering goods, as well as improving export performance to markets like the US, UAE, and China. Despite challenging tariffs, the resilience of Indian industry continues to sustain positive trade trends.

(With inputs from agencies.)