Union Finance Minister Nirmala Sitharaman assured the Rajya Sabha on Tuesday that India’s foreign exchange reserves remain strong and sufficient to manage the country’s current account deficit, despite recent fluctuations. Addressing concerns raised by opposition members regarding financial stability, Sitharaman highlighted India's strong global standing in forex holdings. She stated that as of March 21, 2025, India’s total foreign exchange reserves stood at $658.8 billion. This positions India as the fourth-largest holder of forex reserves globally, ensuring the country can cover 11 months of imports.

She emphasized that the reserves provide a crucial financial cushion, enabling India to absorb global economic shocks and manage fluctuations effectively. Some lawmakers questioned whether recent changes in reserves were due to interventions by the Reserve Bank of India (RBI) in currency markets. However, Sitharaman dismissed these concerns, assuring that the reserves are stable and well-managed.

She reiterated that India's forex reserves play a vital role in stabilizing the rupee and ensuring the country meets its international financial obligations without excessive reliance on external borrowing. The reserves also act as a safeguard against global uncertainties, strengthening India’s financial security.

While acknowledging a slight dip in reserves, Sitharaman reassured lawmakers that the decline was not alarming and reaffirmed the government’s commitment to maintaining economic stability. She underscored that India's forex reserves reflect a position of strength, reinforcing confidence in the country’s financial resilience.

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In a significant regulatory shift, the Petroleum and Natural Gas Regulatory Board (PNGRB) has proposed a new framework for determining pipeline tariffs for gas distribution, aiming to charge the lowest rates for city gas networks supplying CNG and piped cooking gas (PNG) to households. The regulator has released a public consultation document seeking stakeholder feedback on changes to zonal tariffs for pipelines transporting natural gas from production sites or import terminals to users such as power plants, fertilizer units, and city gas suppliers. The proposal intends to boost investments and increase gas consumption, particularly in the transport and domestic sectors.

Under the revised structure, PNGRB suggests reducing the number of tariff zones from three to two and applying the lowest tariff (Zone-1 rate) to all CNG and PNG-domestic consumers, regardless of their distance from the gas source. This move is expected to reduce costs for city gas distributors, especially those located far from supply points, making natural gas more competitive against liquid fuels.

PNGRB, which regulates pipeline tariffs to ensure a 12% normative return on capital investment, had previously implemented a Unified Tariff system in April 2023 to address pricing disparities based on distance. Earlier, tariffs increased with each incremental 300 km of pipeline distance. The current three-zone structure charges 52.5% of the unified tariff for Zone-1 and 75% for Zone-2. The new proposal revises this, setting Zone-1 charges at 66.17% of the unified tariff while applying a 100% rate beyond this zone. However, CNG and PNG-domestic consumers nationwide will continue to be charged at Zone-1 rates, regardless of location.

The proposal also includes incentives for isolated pipeline networks, equitable distribution of benefits from surplus gas volumes between consumers and pipeline operators, and policies for long-term procurement of system use gas (SUG) by pipeline operators. It is expected to drive investment in gas infrastructure, particularly in remote areas, and promote the expansion of CNG and PNG connections.

PNGRB has authorized entities to develop pipelines, distribute piped gas, and establish CNG stations across India, excluding island territories. According to the Minimum Work Programme commitments, the country aims to have 120 million PNG (domestic) connections and 17,500 CNG stations by 2030. As of December 2024, India has 7,395 CNG stations and 14 million PNG domestic connections.

With an anticipated compound annual growth rate (CAGR) of 10% in the city gas distribution (CGD) sector by 2030 and 2040, future gas consumption is expected to rise significantly. Previous PNGRB reforms in 2020 and 2022 focused on encouraging investment in gas networks, particularly in remote areas. Before the introduction of the Unified Tariff system in 2023, pipeline tariffs were distance-based, with higher charges for consumers located far from gasfields and LNG terminals.

The Unified Tariff framework was introduced to standardize gas transportation charges across India’s expanding gas grid. The levelized unified tariff for 2023-24 was set at Rs 73.93 per million British thermal units (mmBtu), with zonal rates distributed as Rs 39.45 per mmBtu for Zone-1, Rs 74.97 per mmBtu for Zone-2, and Rs 99.90 per mmBtu for Zone-3. The proposed amendments are expected to enhance gas accessibility, reduce costs for end-users, and attract investments in pipeline infrastructure, particularly in underdeveloped areas.

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India is projected to contribute 6% to global trade growth over the next five years, as per the DHL Trade Atlas 2025 report, jointly published by New York University’s Stern School of Business and German logistics firm DHL. The report, which analyzes trade trends across nearly 200 countries and territories, indicates that India’s role in global trade expansion will be the third largest, following China at 12% and the United States at 10%. "India also emerges as the country with the third-highest absolute trade growth forecast (6% of additional global trade), trailing only China (12%) and the US (10%)," the report stated. It also highlighted that despite geopolitical challenges and trade policy uncertainties, global trade has shown resilience.

India is expected to maintain its third position in trade scale growth, attributed to its faster trade expansion compared to other major economies. Additionally, the country is projected to improve its ranking on the trade speed dimension, rising from 32nd to 17th place. Although India ranked as the 13th largest player in international trade in 2024, its trade volume grew at a compound annual rate of 5.2% between 2019 and 2024, significantly surpassing the global average of 2.0% during the same period.

"India’s rapid trade expansion is driven by its strong macroeconomic growth and increasing integration into global trade. While China is often seen as a more trade-driven economy, India's goods trade-to-GDP ratio was nearly equal to China’s in 2023. Moreover, India’s trade intensity, considering both goods and services, exceeded that of China," the report noted.

Looking ahead, the report forecasts that India, alongside Vietnam, Indonesia, and the Philippines, will be among the top 30 countries in terms of both trade speed and scale over the next five years. Speaking to ANI, RS Subramanian, SVP South Asia at DHL Express, remarked, "The Trade Atlas highlights India's rapid global trade expansion, reinforcing its role as a key link between the East and West. While we foresee rising trade volumes and an increasing global trade share, we remain cautiously optimistic given ongoing economic volatility."

India's Foreign Trade Status: According to data from the Ministry of Commerce and Industry for March 2025, India’s total exports (including both goods and services) during April-February 2024-25 are estimated at $750.53 billion, marking a 6.24% year-on-year (Y-o-Y) growth from $706.43 billion in the previous fiscal period.

In February 2025, major contributors to merchandise export growth included electronic goods, rice, mica, coal, processed minerals, textiles, and coffee. Trade with key partners such as the US, UAE, UK, China, Japan, Brazil, and Australia remained robust. The trade deficit for the financial year 2023-24 (FY24) narrowed to $78.12 billion, down from $121.6 billion in FY23, as per the Ministry of Finance.

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Russia has surpassed the United Arab Emirates to become India’s top supplier of naphtha in the year leading up to March 2025, as Indian refiners take advantage of discounted shipments, according to preliminary ship-tracking data. This trend is expected to continue for another year. India, the world’s third-largest crude oil importer and consumer, has increasingly relied on cheaper Russian oil to cut import costs, despite Western sanctions aimed at reducing Moscow’s revenues during the Ukraine conflict. Russia has also been India's primary crude oil supplier for the past two years.

Between April 2024 and March 2025, India imported approximately 3 million tonnes (74,000 barrels per day) of naphtha, with Russia accounting for more than half of the total— a significant increase from just 14-16% in the previous year, as per data from OilX and Kpler. Russian naphtha shipments from Ust-Luga, Sheskharis, and Novorossiysk ports were delivered to western Indian ports such as Mundra, Hazira, and Sikka. These supplies were directed to petrochemical plants operated by HPCL Mittal Energy Ltd (HMEL) and Reliance Industries.

HMEL's Managing Director & CEO, Prabh Das, stated at an industry event that the company would continue to buy from the most cost-effective sources but did not specifically comment on Russian oil purchases. Reliance Industries did not respond to requests for comment. As of this week, Russian naphtha was priced $14-$15 per tonne lower than Middle Eastern alternatives, according to two trade sources.

Although India ranks seventh among Asian naphtha importers, its imports are expected to increase due to rising domestic petrochemical demand and the launch of new petrochemical crackers over the next 3-4 years. Meanwhile, the UAE's share—primarily supplied by Abu Dhabi National Oil Company—dropped to just over 20%, nearly half of what it was in the previous period.

A source from an integrated refining complex in northern India noted that the cost-effectiveness of Russian supplies makes them an attractive choice, especially since Indian refining margins have been lower than expected this year. Following Europe’s ban on Russian oil imports in response to the 2022 Ukraine invasion, Russia has redirected its naphtha exports to Asian markets.

Analysts suggest that a potential Ukraine ceasefire deal being pursued by the Trump administration could lead to the lifting of sanctions on Russian oil. However, even if U.S. sanctions are removed, Europe may still avoid Russian imports, ensuring that Asian countries remain Russia’s primary oil buyers, according to Rystad Energy analyst Jorge Leon.

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