India’s Trade Trends in Q1 2025: A UPSC Perspective

India’s Trade Trends in Q1 2025: A UPSC Perspective | Suryavanshi IAS

🇮🇳 भारत के व्यापार में पहली तिमाही में बड़ा सुधार

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🔍 Why This Topic Is Important for UPSC?

Trade data reflects the health of India’s economy, global competitiveness, and export-import policies. UPSC frequently asks questions in Prelims (Economy, Current Affairs) and Mains (GS Paper III - Economy) based on trade trends, balance of payments, and external sector performance.

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🔹 Overview: India’s Q1 Trade Performance (April–June 2025)

Parameter	Q1 FY 2025	Growth (%)
Overall Exports	$210.3 billion	↑ 6%
Services Exports	$98.1 billion	↑ 11%
Merchandise Exports	$112.2 billion	↑ 2%
Overall Imports	$230.6 billion	↑ 4.4%
Trade Deficit	$20.3 billion	↓ 9.4%

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📌 Key Terms Explained for UPSC

1. Trade Deficit (व्यापार घाटा):

When a country imports more goods and services than it exports.
Formula:
Trade Deficit = Total Imports – Total Exports

➡️ Q1 2025: $230.6B - $210.3B = $20.3 billion trade deficit

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2. Merchandise Exports (वस्तु निर्यात):

Export of tangible goods such as electronics, marine products, tea, etc.

3. Services Exports (सेवा निर्यात):

Export of intangible services like IT, finance, education, consultancy, etc.

4. Non-Petroleum Exports (गैर-पेट्रोलियम निर्यात):

Exports excluding petroleum-related products.
📌 Grew by 6%, showing sectoral diversification.

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🚀 Sector-Wise Highlights

📱 Electronics:

Highest growth in merchandise exports
📈 47.1% growth → $12.4 billion

🐟 Marine Products:

📈 Grew by 19% → $1.9 billion

🍵 Tea & Tobacco:

📈 Tea ↑ 16%, Tobacco ↑ 19%

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📥 Major Import Growth Sectors

Product	Growth (%)
Sulphur & Unroasted Iron Pyrites	↑ 284%
Silver	↑ 216%
Chemicals	↑ 142%
Raw & Waste Cotton	↑ 73%

🌍 India’s Top Trade Partners in Q1 FY25

Top Export Destinations:

1. 🇺🇸 USA – $25.5 billion (↑ 22.1%)

2. 🇦🇪 UAE – $9.04 billion

3. 🇳🇱 Netherlands – $5.65 billion

4. 🇨🇳 China – $4.4 billion

5. 🇬🇧 UK – $3.3 billion

Top Import Sources:

1. 🇨🇳 China – $29.7 billion (↑ 16%)

2. 🇦🇪 UAE – $16.8 billion

3. 🇷🇺 Russia – $16.77 billion

4. 🇺🇸 USA – $12.86 billion

5. 🇮🇶 Iraq – $7.26 billion

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🔍 Significance for India

• Improved Services Exports → Boosted forex reserves

• Controlled Trade Deficit → Better current account position

• Diversified Export Base → Less reliance on petroleum

• Geopolitical Trends → Increased trade with Western economies (USA, Netherlands)

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📚 Previous Year UPSC Questions (With Explanation)

✅ Prelims – UPSC 2020

Q. Which one of the following best describes the term ‘Balance of Trade’?
A. Difference between exports and imports of goods
B. Difference between exports and imports of services
C. Difference between income and expenditure of the government
D. Difference between capital receipts and capital payments

🟩 Answer: A
📖 Explanation: "Balance of Trade" refers only to goods, not services.

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✅ Mains – UPSC 2022 (GS Paper 3)

Q. Examine the impact of rising services exports on India’s trade deficit.

🖊️ Answer Framework (for UPSC Mains):

• Introduction: Define trade deficit and services exports.

• Body:

  • Role of IT and digital services

  • Comparative advantage of India

  • Helped offset merchandise trade deficit

  • Impact on forex reserves, rupee stability

• Conclusion:

  • Need for policy to enhance services competitiveness

  • Importance of bilateral trade deals

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🧠 Mind Map: India’s Q1 2025 Trade Performance

                 [India’s Trade Q1 2025]
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[Merchandise Exports] [Services Exports] [Imports]
     |                        |                 |
Electronics ↑47%     IT & BPO ↑11%       Silver ↑216%
Marine ↑19%           $98.1 billion       Sulphur ↑284%
Tea & Tobacco ↑16-19%                      Chemicals ↑142%

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🔚 Conclusion

📌 India’s trade performance in Q1 FY25 reflects a positive shift towards services-led export growth. With strategic focus, India is poised to surpass the $825 billion export milestone set last year. UPSC aspirants must watch such trends to understand the dynamic nature of India’s economy.