India’s trade deficit reduced
In June 2025, India’s trade deficit shrinked slightly to $ 20.7 billion, which was $ 21.9 billion in May. According to a new report by Union Bank of India (UBI), cheap crude oil, reduction in gold procurement and wisely purchases played a big role in reducing this deficit. Despite the prices of goods around the world, India kept the trade better with its clever strategy.
Relief in the purchase of oil, Russia-America became reliable companions
In June, crude oil prices fell somewhat soft, which benefited India. A short time peace between Israel and Iran and the over -production of OPEC+ countries reduced India’s oil purchase expenses slightly. In May, Brent crude was priced at $ 64.01 per barrel, which increased to $ 69.80 in June. Nevertheless, the cost did not increase due to good availability of oil. According to the Energy Analytics firm Vortexa, India imported 4.66 million barrels per day (MBPD) oil in June, a little less than the 4.72 Mbpd in May.
India also changed the strategy to buy oil. Oil purchased from Russia reached the highest level of two years at 2-2.2 Mbpd. Also, there was a tremendous increase of 270% in the first four months of 2025 in the purchase of oil from the US. With this cleverness, India reduced its dependence on the old oil suppliers of the Middle East, especially from the risky areas like Straight of Hormuz.
However, the export of petroleum products declined. In June it fell 10% to 1.19 Mbpd, which was 1.32 MBPD in May. Exports also decreased by 3.7% on an annual basis, which prevented the trade deficit from getting better.
Gold procurement fell, skyrocketing prices became interruptions
Gold imports also decreased in June. Gold prices worldwide reached $ 3,353 an ounce, which was 5% more than May and 32% more than the year. Gold purchases were reduced due to high prices, strict rules and low demand in the country. According to the initial figures, gold imports in May were 30.56 tonnes, which was less than 34.87 tonnes in April. This is expected to be less in June.
Coal imports stable, demand for electricity and factories remained
Coal imports increased slightly in June. 16.59 million tonnes of coal came from the large ports, which was 1.2% more than the previous year, but 2.1% less than May. Thermal coal, which is 70.2% of the total imports, increased by 7.2% compared to the previous year. This shows the strong demand for electricity and industry. The government took several big steps to control the trade deficit-
- Put anti-dumping duty on four Chinese chemicals.
- Ban on import of jute and woven clothes from Bangladesh.
- Demand to stop procurement of iron and pellets from Oman, as Indian industries complained of damage from Cargo of Iranian origin.
Luggage prices will decide the way
The UBI report clearly states that if the prices of oil and metals rise worldwide, India’s import expenses may increase. However, decrease in global demand and the lethargy of export can reduce this pressure. It is written in the report, later, the trend of goods prices will decide the direction of India’s trade deficit.