New Delhi: The reduction in India’s trade deficit is a promising sign of the sector beginning to rebalance, presenting opportunities for domestic industries to grow, the Federation of Indian Export Organisations (FIEO) said on Monday.
While exports have faced some challenges, particularly due to the global tariff war, the sharp decline in imports signals a reduction in demand for foreign goods.
India’s merchandise trade deficit narrowed to an over 3-year low at $14.05 billion in February from $22.99 billion in January as exports held steady during the month while imports declined, according to the latest data compiled by the Ministry of Commerce and Industry.
The country’s merchandise exports increased by 1.3 per cent to $36.91 billion in February, as compared to $36.43 billion in January, while imports fell by 16.3 per cent to $50.96 billion compared with $59.42 billion in the previous month.
According to Ashwani Kumar, FIEO President, 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 imported goods.
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 revitalise export growth, particularly through targeted initiatives that enhance India’s competitiveness on the global stage.
Notably, cumulative merchandise and services exports during the April-February period of this fiscal year saw an encouraging rise of 6.24 per cent, reaching $750.53 billion, up from $706.43 billion in the previous year.
To capitalize on this, FIEO 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.
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, he noted.
(IANS)
