India's Trade Deficit Narrows in December to $21.94 Billion

Chennai: India’s trade deficit narrowed in December to $21.94 billion compared to the revised November trade deficit of $32.84 billion. However, 1 per cent drop in exports and 4.9 per cent growth in imports saw trade deficit widening from year ago levels.

India’s merchandise exports contracted 1 per cent to $38.01 billion in December against $38.39 billion a year ago. Some of the products that registered high growth were cereals 68 per cent, rice 64 per cent, electronics products 35 per cent, and engineering goods 8.35 per cent. Pharmaceuticals clocked a meagre growth of 0.63 per cent.

Imports increased by 4.8 per cent to $59.95 billion in December compared to $57.15 billion in the year-ago month.

The trade deficit stood at $21.94 billion during the month against $18.76 billion in December 2023. However, this was lower than the revised November trade deficit of $32.84 billion. The government had revised the November trade deficit from $37.84 billion to $32.84 billion after the gold imports revision.

“India’s merchandise trade deficit narrowed quite sharply to $21.9 billion in December 2024 from the record levels of over $30 billion in the previous month, led by a near-halving in gold imports and dip in the net oil import bill between these months,” said Aditi Nayar, chief economist, ICRA.

Overall exports, including services, rose to about $70.7 billion in December, while imports rose to $77.4 billion, resulting in a deficit of $6.8 billion.

During April-December 2024, exports grew 6.03 per cent to $602.64 billion against $568.36 billion during the same period in 2023. On the other hand, imports rose to $682.15 billion against $638 billion in the year ago period.