The moderation was attributed to falling crude prices, subdued gold imports, and a recalibrated sourcing strategy that helped buffer the impact of global commodity fluctuations.
Oil imports dip amid shifting global dynamics
A short-lived decline in crude prices—following the temporary Israel-Iran ceasefire—alongside increased oil production by OPEC+ helped ease India’s oil-related import bill. Although Brent crude rebounded to USD 69.80/bbl in June, up from USD 64.01/bbl in May, the broader supply landscape remained favorable, preventing a sharp spike in costs.
India’s crude oil imports stood at 4.66 million barrels per day (mbpd) in June, marginally lower than 4.72 mbpd in May, according to energy analytics firm Vortexa.
A noteworthy shift in sourcing further supported the trade balance. Indian refiners ramped up purchases from Russia and the United States, both of which surpassed traditional Middle Eastern suppliers.
Russian oil imports touched a two-year high of 2–2.2 mbpd, while shipments from the US surged over 270% year-on-year in the first four months of 2025. This strategic diversification reduced exposure to geopolitical hotspots, particularly the Strait of Hormuz.
Despite the improvement in oil import dynamics, India’s petroleum product exports fell nearly 10% in June, dropping to 1.19 mbpd from 1.32 mbpd in May. On an annual basis, exports declined 3.7%, which limited the extent of overall improvement in the trade deficit.
Gold imports fall as prices soar
India’s gold trade deficit also narrowed in June amid a combination of high prices, tighter regulations, and subdued domestic demand. Global gold prices averaged USD 3,353/oz, marking a 5% monthly and 32% year-to-date rise in USD terms. These elevated prices deterred fresh imports.
Preliminary figures indicated a dip in gold imports to 30.56 tonnes in May, down from 34.87 tonnes in April, with expectations of a further fall in June.
Coal imports stable
India imported 16.59 million tonnes (MT) of coal through major ports in June, registering a 1.2% year-on-year increase, though marginally lower by 2.1% compared to May.
Thermal coal, accounting for 70.2% of the total, rose 7.2% from the same period last year, reflecting sustained demand from power and industrial sectors.
Trade policy measures: Anti-dumping & import curbs
The government stepped up trade enforcement through several policy interventions. These included:
- Anti-dumping duties on four Chinese chemicals
- Import bans on jute and woven fabric from Bangladesh due to reported violations
- Calls to restrict iron ore pellet imports from Oman, with domestic producers raising red flags over alleged Iranian-origin cargo undermining the Indian industry.
The UBI report cautioned that any continued rise in global commodity prices, especially oil and metals, could add pressure to India’s import bill in the coming months. However, softening global demand and sluggish exports may help offset this, keeping the overall trade balance from deteriorating sharply.
“Going forward, commodity price trends will remain critical in assessing the trajectory of India’s trade deficit,” the report concluded.
(With ANI inputs)
