Get Instant Loan up to ₹10 Lakh!
New Delhi: India’s merchandise trade deficit fell to a three-month low of $21.94 billion in December on the back of higher exports, data released by the commerce ministry on Wednesday showed.
the merchandise trade deficit stood at $18.76 billion in the year-ago period.
Economists had expected the December trade deficit to be $27.33 billion, according to a Reuters poll.
The goods trade deficit—the difference between exports and imports—had steadily widened to $37.84 billion in November, $27.4 billion in October, and $20.78 billion in September.
The deficit was $29.65 billion in August, $23.5 billion in July, $20.98 billion in June, $23.78 billion in May, and $19.1 billion in April.
To be sure, the ministry revised its import figures for April-November downward after finding a mismatch in gold shipments data.
The error was attributed to the transition of data transmission systems, which led to double counting of imports routed through special economic zones and their clearance to domestic zones.
As a result, the ministry revised November's gold import figures downward by $5 billion, reducing them from $14.8 billion to $9.9 billion, which in turn narrowed the overall goods trade deficit for the month to $32.84 billion, down from the previously reported figure of about $37.84 billion.
During December, merchandise exports stood at $38.01 billion, while imports stood at $59.95 billion, the data showed, compared with $38.39 billion of exports and $57.15 billion worth of imports during the year-ago period.
The cumulative value of merchandise exports for April-December 2024 stood at $321.71 billion, marking a 1.6% increase compared with $316.65 billion during the same period in 2023.
Services exports rose to $32.66 billion in December, up from $31.63 billion in the year-ago period, while services imports stood at $17.50 billion during the month, up from $15.63 billion in the year-ago period.
The combined value of merchandise and services exports touched $70.67 billion in December, up from $70.02 billion in the year-ago period.
India’s foreign trade has been hit by weak demand in major markets, geopolitical tensions and volatile commodity prices. Sluggish growth in key markets has lowered demand for exports while rising global fuel costs have increased expenses.
In April, the World Trade Organization (WTO) had forecast a recovery in global merchandise trade in 2024 following a weak 2023 that was marked by inflation and high energy prices.
The WTO expects trade volumes to grow by 2.6% in 2024 and 3.3% in 2025, though geopolitical risks remain.
Electronic goods, engineering goods, rice, readymade garments, and handloom products were key drivers of merchandise exports in the April-December period, while major imports included crude oil, petroleum products, electronic goods and gold.
Non-petroleum exports in December 2024 were valued at $33.09 billion, reflecting a 5.05% increase compared with $31.50 billion in December 2023.
For the April-December 2024 period, cumulative non-petroleum exports stood at $272.70 billion, marking a 7.05% growth compared with $254.74 billion in the same period of 2023.
Meanwhile, non-petroleum and non-gems & jewellery exports grew by 8.25%, rising from $28.60 billion in December 2023 to $30.96 billion in December 2024.
India’s major export destinations during this period were the US, UAE, Netherlands, UK and China.
Meanwhile, China, Russia, the UAE, the US and Saudi Arabia remained the top suppliers, reflecting the country’s dependence on oil imports.
India's total exports are expected to rise above $800 billion by FY25-end, trade secretary Sunil Barthwal said after the release of the latest monthly trade data.
"Our growth is much better than that of the rest of the world. That shows the resiliency of our exports. That also shows our capacity and competitiveness," Barthwal said.
"Despite, all the global issues, we have done better than the rest of the world," he added.
Deepali Agrawal, deputy managing director of India Exim Bank, said, “The trade data for December 2024 highlights India’s sustained growth momentum in non-oil, non-gems and jewellery exports, underpinned by robust contributions from both labour-intensive and technology-intensive manufacturing sectors."
"Textiles, agriculture, engineering goods, and electronics have demonstrated strong and consistent growth, underscoring the diversified and resilient nature of India’s export base. The turnaround in the readymade garments sector is noteworthy, which, after two years of subdued performance, registered an impressive 11.6% growth during April–December 2024,” said Agrawal.
Catch all the Business News , Economy news , Breaking News Events andLatest News Updates on Live Mint. Download TheMint News App to get Daily Market Updates.