India’s overall trade deficit contracted 9.4% to $20.3 billion in the first quarter of this financial year, driven by a nearly 11% growth in services exports during this period, according to official data.

Data released by the Ministry of Commerce and Industry on Tuesday showed that India’s overall exports grew to $210.3 billion in the April-June 2025 quarter, up from $198.5 billion in the first quarter of the last financial year, rising about 6%. 

“If exports grow the way they have grown in quarter one of this financial year, then we are going to beat last year’s record exports,” Commerce Secretary Sunil Barthwal said at a press briefing. “In fact, if you look at this quarter, both merchandise as well as services are in the positive territory and better than what was expected by the [World Trade Organisation] WTO in terms of world trade.”

Merchandise exports slow

India’s total exports had stood at an all-time high of $825 billion in the last financial year, 2024-25.

Within India’s total exports, it was services that drove the growth. Services exports rose to $98.1 billion in the first quarter of this financial year, up nearly 11% from the $88.5 billion seen in the same quarter of last year. 

Merchandise exports grew just 2% in the April-June 2025 quarter, to $112.2 billion. However, Mr. Barthwal emphasised that a large part of this slowdown was due to falling petroleum prices, since India’s non-petroleum exports grew 6% during this period. 

India’s total imports grew 4.4% in Q1 of this financial year to $230.6 billion, with merchandise imports growing 4.2% and services imports growing 4.9% during this period. 

Sectoral growth

During the quarter, the electronics sector saw the highest growth in exports, rising 47.1% to $12.4 billion. This was followed by the exports of marine products, which grew by more than 19% to $1.9 billion. Tobacco and tea exports, too, saw double-digit growth of around 19% and 16%, respectively. 

On the import side, the items that witnessed the highest growth were sulphur and unroasted iron pyrites (284%), silver (216%), chemical materials and products (142%), and raw and waste cotton (73%).

Top destinations

The United States remained the top export destination for India, with exports to that country growing 22.1% to $25.5 billion in Q1 of this financial year. The other top-five export destinations are the United Arab Emirates ($9.04 billion), the Netherlands ($5.65 billion), China ($4.4 billion), and the United Kingdom ($3.3 billion).

.On the other hand, China remained the top source of India’s imports, with imports from that country growing 16% to $29.7 billion. This was followed by the UAE ($16.8 billion), Russia ($16.77 billion), the U.S. ($12.86 billion), and Iraq ($7.26 billion).