India’s merchandise trade deficit widened sharply in January, reflecting persistent weakness in exports. The deficit stood at $23 billion, up 39% from a year ago and 5% higher than December’s $21.93 billion. The primary driver was a contraction in exports, which fell for the third consecutive month, declining 2.4% to $36.43 billion. Imports, meanwhile, grew 10.3% to $59.42 billion despite a drop in crude oil imports.The composition of exports suggests a fundamental shift in India’s trade dynamics. Petroleum product exports, traditionally a major contributor, collapsed 58.7% to $3.56 billion when compared with January last year. In contrast, engineering goods, India’s largest export category, grew 7.4% to $9.42 billion, while electronic goods surged 79.0% to $4.11 billion.
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