India’s merchandise trade deficit fell to three-month low of $21.9 billion in December, coming in sharply lower than a revised figure of $31.8 billion for the previous month. The slump in exports continued, with December shipments of $38.01 billion being 1% lower on year, pulled down by declines in exports of petroleum products and gems and jewellery
Yet, the trade deficit in April-December period was 14% wider than in the year-ago period, which officials reckon is due to strong investment and consumption demands in the economy.
The decline in trade deficit has allayed any concerns over the current account deficit, with analysts believe could be around 1% in FY26. Trade deficit in December 2013 was $18.1 billion.
The sharp fall in trade deficit in December would ease pressure on the rupee, which has been falling sharply over recent trade sessions. Imports of gold fell to $ 4.7 billion from a res-estimated $9.84 billion in November.
Imports during December rose 4.9% on year to $ 59.95 billion.
The government has also revised the import figures for November to $ 63.8 billion from $ 69.95 billion stated earlier. This massive revision came after the data of imports of gold, silver and electronics were reset. The exports for November were also adjusted to $ 32 billion from $ 32.11 billion. Earlier the April-November deficit was reported to be $ 202.42 billion, but now it is pegged at $ 188.9 billion.
“Our trade growth is quite good and we will be crossing $ 800 billion in goods and services exports this financial year. We have done better than the rest of the world which shows the resilience of our exports and improvement in manufacturing competitiveness,” secretary in the department of commerce Sunil Barthwal said.
In the calendar year 2024 India’s overall exports have grown 5.6% to $ 812.4 billion. This growth is much better than the 3.3% growth in world trade forecast by UNCTAD.
The drivers of export growth in December were the engineering sector that grew 8.3% to $ 10.8 billion and electronics goods that grew 35% to $ 3.5 billion. The exports from the apparel sector were up 12.9% to $ 1.4 billion. Rice exports also were on an upswing growing at 64% to $ 1.4 billion.
The petroleum exports were down 28.6% to $ 4.9 billion while gems and jewellery exports were down 26% to $ 2.1 billion.
In line with the growth in the apparel sector the imports of raw cotton and waste was up 384% to $ 142.8 million. While gold imports moderated, imports of silver grew 210% to $ 421.9 million.
The services exports in December were up 3.2% to $ 32.66 billion while imports were 11.9% to $ 17.5 billion.
In April-December the merchandise exports were up 1.6% to $ 321.71 billion while imports were up 5.15% to $ 532.4 billion. Overall exports in April-December were up 6.03% to $ 602.6 billion while imports were up 6.91% to $ 682.15 billion.
In December, India’s shipment rose positively to the US, Saudi Arabia, France,
Bangladesh and Sri Lanka while the top five import sources were China, Switzerland, Thailand, Germany and the US.
