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Exports to the US rose 20% and to China 27.39%, aided by front-loaded shipments ahead of US tariffs.
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After two months of tepid performance, India’s exports of goods increased 7.3 per cent in July 2025 (year-on-year) to $37.24 billion, pulled up by engineering goods, gems & jewellery, electronics and pharmaceuticals.
However, the trade deficit increased to an eight-month high of $27.35 billion in July 2025, as imports rose 8.6 per cent to $64.59 billion during the month, according to preliminary estimates released by the Commerce Department. This was 14 per cent higher than the trade deficit of $23.5 billion in July 2024.
US, China lead export surge
Exports to the US continued to rise in July 2025, increasing 20 per cent to $8.01 billion, as exporters attempted to front-load their shipments ahead of the August reciprocal tariffs. Exports to China also posted strong growth of 27.39 per cent to $1.34 billion.
“Despite uncertain global policy environment, India’s services and merchandise exports in July and in FY26 so far have grown substantially, and much higher than the global exports growth,” said Commerce Secretary Sunil Barthwal at a press briefing on Thursday. However, there was a drop in exports in a couple of major sectors, including petroleum products and iron ore.
Government unveils 4-pillar tariff strategy
The government is working on a four-pillar strategy to help counter the negative impact of US tariffs on Indian exports, Barthwal said. This includes strengthening export promotion, improving export competitiveness, export diversification and import diversification.
The sharper rise in imports was led by petroleum and crude oil, gold, electronics and fertilisers. Inbound shipments of petroleum items increased 7.4 per cent to $15.5 billion during the month, while gold imports rose 13.8 per cent to $3.97 billion.
“The growth (in exports) in July 2025 was supported by the continued surge in exports to the US, witnessed since the beginning of 2025, although growth in exports to other geographies also turned positive after a gap of two months. Non-oil exports drove the uptick in overall exports in July 2025, even as oil exports contracted by 25 per cent compared to a year earlier,” Aditi Nayar, Chief Economist, ICRA, said.
During April-July 2025-26, India’s exports increased by 3.07 per cent to $149.2 billion, while imports rose 5.36 per cent to $244.01 billion. The trade deficit during the first four months of 2025-26 was $94.81 billion.
Published on August 14, 2025
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