India’s trade gap narrows on oil, gold slump

India’s merchandise trade deficit eased slightly to USD 20.7 billion in June 2025, down from USD 21.9 billion in May, according to a report by Union Bank of India (UBI).
The moderation was attributed to falling crude prices, subdued gold imports, and a recalibrated sourcing strategy that helped buffer the impact of global commodity fluctuations, reports the economic times.
A short-lived decline in crude prices—following the temporary Israel-Iran ceasefire—alongside increased oil production by OPEC+ helped ease India’s oil-related import bill. Although Brent crude rebounded to USD 69.80/bbl in June, up from USD 64.01/bbl in May, the broader supply landscape remained favorable, preventing a sharp spike in costs.
India’s crude oil imports stood at 4.66 million barrels per day (mbpd) in June, marginally lower than 4.72 mbpd in May, according to energy analytics firm Vortexa.
A noteworthy shift in sourcing further supported the trade balance. Indian refiners ramped up purchases from Russia and the United States, both of which surpassed traditional Middle Eastern suppliers.
Russian oil imports touched a two-year high of 2–2.2 mbpd, while shipments from the US surged over 270% year-on-year in the first four months of 2025. This strategic diversification reduced exposure to geopolitical hotspots, particularly the Strait of Hormuz.
Despite the improvement in oil import dynamics, India’s petroleum product exports fell nearly 10% in June, dropping to 1.19 mbpd from 1.32 mbpd in May. On an annual basis, exports declined 3.7%, which limited the extent of overall improvement in the trade deficit.
India’s gold trade deficit also narrowed in June amid a combination of high prices, tighter regulations, and subdued domestic demand. Global gold prices averaged USD 3,353/oz, marking a 5% monthly and 32% year-to-date rise in USD terms. These elevated prices deterred fresh imports.
Preliminary figures indicated a dip in gold imports to 30.56 tonnes in May, down from 34.87 tonnes in April, with expectations of a further fall in June.
India imported 16.59 million tonnes (MT) of coal through major ports in June, registering a 1.2% year-on-year increase, though marginally lower by 2.1% compared to May.
Thermal coal, accounting for 70.2% of the total, rose 7.2% from the same period last year, reflecting sustained demand from power and industrial sectors.