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India's trade deficit widens to 8-month high of $27.35 billion in July

India's trade deficit widened to an eight-month high of $27.35 billion in July, as imports grew at a faster pace than exports, data from the commerce department showed. The trade deficit stood at $24.77 billion in July last year and $18.78 billion in June this year. Imports rose 8.61 per cent year-on-year (Y-o-Y) to $64.59 billion in July. Merchandise exports grew 7 per cent to $37.24 billion, driven by higher demand for engineering goods, electronics, drugs and pharmaceuticals, and organic and inorganic chemicals. The commerce department is yet to share the detailed trade data. Outbound shipments to the United States doubled to $8 billion in July as exporters rushed to complete orders ahead of the 25 per cent reciprocal tariffs on Indian goods, which took effect on 7 August. Services exports grew 1.4 per cent to $31.03 billion in July, while services imports contracted 3.4 per cent to $15.4 billion, resulting in a surplus of $15.63 billion. However, the services trade data for July is an 'estimate' and will be revised after the Reserve Bank of India 's release. Promoting exports Due to an uncertain global policy environment, mainly from US tariff measures, the government is adopting a 'clear-cut strategy' to improve export competitiveness, strengthen promotion, and diversify export baskets and markets. India is fast-tracking free trade agreements (FTAs) and reviewing existing trade deals. The agreement with the four-member European Free Trade Association (EFTA) nations will come into force on 1 October, while India has reached out to the United Kingdom to expedite its FTA by completing parliamentary procedures. The pact with Oman has been finalised and will be signed soon. Talks with the European Union are also being fast-tracked. Barthwal said progress has been 'good', with further meetings expected at the secretary and ministerial levels. The government aims to complete FTA negotiations with Chile and Peru by the end of this year and substantially conclude the review of the pact with the 10-member ASEAN bloc by October. India is also expanding its focus on the top 50 countries, which account for 90 per cent of its exports, by mobilising missions abroad for proactive and sustained promotion efforts. Further, the Export Promotion Mission (EPM), announced in the Union Budget FY26, is under inter-ministerial consultation. It aims to deliver broad-based, inclusive, and sustainable export growth from FY25 to FY31 by going beyond conventional mechanisms to address bottlenecks, especially for MSME exporters. The EPM will be anchored in a collaborative framework involving the commerce department, MSME ministry, finance ministry, and other stakeholders. It will have two sub-schemes — Niryat Prosahan, which will provide trade finance support, and Niryat Disha, which will drive international market access.