US Tariff Deadline Causes 9.1% Increase in Exports

India experienced a notable increase in exports, rising by 9.1% in April to reach $38.49 billion. This growth was largely fueled by a significant 27.38% jump in shipments to the United States. On the other hand, imports surged by 19.12%, leading to a widening of the trade deficit to $26.42 billion. The robust performance in sectors such as engineering, electronics, and garments underscores the export growth momentum amid global trade uncertainties.

In April, merchandise exports soared to a six-month peak of $38.49 billion, spurred by a substantial rise in shipments to the US. Exporters aimed to expedite their orders before the implementation of the reciprocal tariffs announced by the Trump administration. Exports to the US climbed by 27.38% to $8.42 billion that month, rebounding from a modest growth of just 0.65% in March, and reversing the contractions seen over the preceding four months. The tariffs announced on April 2 have been suspended until July 8. Commerce Secretary Sunil Barthwal mentioned that part of the export increase could be attributed to a “tariff differential” advantage over competitors.

In addition, goods imports in April increased at an impressive rate of 19.12%, totaling $64.91 billion, driven by a rise in crude oil and industrial goods imports such as machinery and minerals. This trend indicates robust domestic output and rising investment demand within the economy.

April recorded a trade deficit of $26.42 billion, the highest since November 2024, when it reached $31.9 billion. “Given the optimism observed in April, I am confident that India can sustain this export momentum, making this year favorable for us despite the challenges in the external sector,” stated Commerce Secretary Sunil Barthwal. However, some experts expressed skepticism regarding whether this rebound could be maintained, citing stagnant global trade volumes anticipated for 2025.

Barthwal highlighted that record exports, totaling $825 billion for merchandise and services combined in the previous financial year, despite facing headwinds, reflect the resilience of Indian exporters and the supportive strategy of the government. Notably, goods exports saw a contraction of 3% in FY24 and minimal growth in FY25, although buoyant services exports contributed positively to the overall export momentum.

“Our strategy is to concentrate on 20 countries that account for 65% of our exports, focusing on six sectors responsible for 60% of our export output. Additionally, prioritizing six sub-services in the services sector proved effective in the last financial year, and this approach will continue,” Barthwal added. In April, services exports surged by 17%, reaching $35.31 billion, while imports rose by 4.65% to $17.54 billion.

“To sustain this momentum, it is crucial to receive ongoing support through consistent policies, improved trade facilitation, enhanced logistics, and the timely conclusion of FTAs, particularly with the UK, US, EU, Oman, and GCC countries,” remarked S. C. Ralhan, president of the Federation of Indian Export Organizations (FIEO). He also asserted that access to affordable credit, especially for MSMEs, along with the timely provision of incentives such as Interest Equalization, RoDTEP, and other export benefits, is essential to maintain export competitiveness and achieve ambitious growth targets.

Engineering goods exports have continued their positive trajectory, expanding by 11.28% year-on-year to $9.5 billion. The electronics sector witnessed the most significant growth, with shipments skyrocketing by 39.51% to $3.7 billion. After several months of decline, gems and jewelry exports returned to positive growth, increasing by 10.74% to $2.50 billion. Even petroleum product exports saw a positive shift, growing by 4.68% to $7.37 billion. Additionally, ready-made garment exports rose by 14.43% to $1.37 billion. Meanwhile, electronic goods imports jumped by 31.19% to $9.25 billion, and despite lower international prices, crude imports climbed by 25% to $20.71 billion, while machinery imports grew by 23.20% to $4.67 billion.