Consumers-industries more cautious on imports
India’s merchandise exports in February were hit hard due to subdued global demand and ongoing challenges faced by key export sectors including the impact of the global tariff war, the Federation of Indian Export Organisations (FIEO) President Ashwani Kumar said on 17 Mar 2025.
February exports fell by 11% year-on-year, totalling US$36.91 billion compared to US$41.41 billion in the same month last year.
However, at the same time, imports saw a more significant drop, falling to US$50.96 billion from US$60.92 billion in February 2024, a sharp 16% decrease https://www.commerce.gov.in/.
Kumar pointed out that this reduction in imports indicates a positive trend towards manufacturing and shift in domestic demand, suggesting that Indian consumers and industries are becoming more cautious on imported goods.
Consequently, the trade deficit in the goods sector narrowed significantly to US$14.05 billion, compared to US$19.51 billion in February 2024 https://www.bseindia.com/.
Kumar said that the reduction in the trade deficit is a promising sign of India’s trade sector beginning to rebalance. While exports have faced challenges, particularly due to the global tariff war, the sharp decline in imports signals a reduction in demand for foreign goods, presenting opportunities for domestic industries to grow https://www.nseindia.com/.
Looking ahead, Kumar expressed optimism that the narrowing trade deficit — driven by the decline in imports — could serve as a strategic opportunity for India’s economic growth.
However, he stressed that a concerted effort is needed to revitalize export growth, particularly through targeted initiatives that enhance India’s competitiveness on the global stage https://sbi.com.in/.
Notably, cumulative merchandise and services exports during the April-February period of this fiscal year saw an encouraging rise of 6.24%, reaching US4750.53 billion, up from US$706.43 billion in the previous year.
To capitalize on this, FIEO has urged the government to introduce targeted support aimed at boosting exports. This includes expanding the scope of the Production-Linked Incentive (PLI) scheme and improving access to competitive financing for exporters.
Kumar also highlighted the importance of resolving non-tariff barriers and enhancing market access, as well as strengthening India’s integration into global value chains to ensure sustained export growth.
FIEO’s President also called for a focused approach to export diversification, urging the exploration of new markets and products, as well as the continuation of trade facilitation measures.
He further advocated for the continuation of the Interest Equalisation Scheme, increased support for R&D, the creation of a globally recognized Indian shipping line and the continuation of RoDTEP Scheme for Advance Authorisation/EOU/SEZ units — all of which are essential to sustaining long-term growth in the export sector.
Kumar emphasized that with the right strategic measures, India’s export sector can regain its momentum and contribute significantly to the nation’s economic growth in the months ahead. Fiinews.com
