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    India’s Trade Deficit Shrinks to Five-Month Low as Exports to US Recover

    1 month ago

    India’s merchandise trade deficit narrowed sharply in November, falling to a five-month low of $24.53 billion, supported by a decline in key imports and a rebound in shipments to the United States, according to official government data released on Monday.

    The improvement came as imports of gold, crude oil and coal eased during the month, helping reduce the gap between exports and imports. Economists had earlier expected the deficit to remain much wider, following October’s record shortfall of over $41 billion.

    Overall merchandise exports rose to $38.13 billion in November, up from $34.38 billion in October. At the same time, imports declined significantly to $62.66 billion from $76.06 billion in the previous month, contributing to the sharper narrowing of the trade gap.

    Exports to the United States, India’s largest overseas market, showed a notable recovery. Shipments rose nearly 10% compared to October and increased by more than 21% year-on-year to $6.92 billion. This followed a dip in October, when exports to the US had fallen on an annual basis.

    Senior government officials said India has managed to maintain export momentum to the US despite higher tariffs. They also indicated that New Delhi and Washington are close to finalising a framework agreement aimed at easing bilateral trade frictions, although no timeline has been announced.

    Talks between officials from both countries have focused on reciprocal tariff reductions and broader market access. While India is seeking relief for its major export sectors, the US has been pushing for lower trade barriers and greater access for American agricultural products.

    In addition to merchandise trade, services continued to provide support to India’s external balance. Services exports in November were estimated at $35.86 billion, while imports stood at $17.96 billion, indicating a services trade surplus of nearly $18 billion. More detailed services trade data is expected to be released by the central bank later this month.

     

    The latest figures suggest a stabilisation in India’s trade position after recent volatility, with improving export performance and moderating imports helping ease pressure on the overall balance.

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