India’s merchandise trade deficit declined significantly in November 2025, falling to $24.53 billion — the lowest in five months — compared with a record wide $41.68 billion deficit in October. This marked improvement reflects both stronger exports and reduced import demand.
📊 Key Numbers
- Merchandise trade deficit (Nov 2025): $24.53 billion, down sharply from $41.68 billion in October.
- Exports: About $38.13 billion — up roughly 19–20% year-on-year and the highest in recent months.
- Imports: Declined to around $62.66 billion, partly due to lower shipments of gold, oil and coal.
- Services surplus: Estimated robustly at ~$17.9 billion, helping cushion the overall trade position.
📈 What Drove the Improvement
1. Pickup in Exports
India saw a healthy rebound in outbound shipments, including key sectors such as engineering, electronics, gems and jewellery, pharmaceuticals and petroleum products. Shipments to major markets like the United States rose significantly despite global tariff pressures.
2. Import Moderation
Lower demand for costly commodities — especially gold imports falling sharply — helped reduce the import bill. Combined with slightly weaker oil and coal inflows, this tempered overall spending on goods from abroad.
📉 Broader Context
October data had shown a sharp widening of the trade gap due to a slump in exports and a surge in imports, especially gold — which drove the deficit to over $41 billion. November’s figures effectively reversed much of that impact.
📌 Why It Matters
- Economic signal: A narrowing trade deficit supports a more balanced external account and may ease pressure on the current account and the rupee.
- Export resilience: Strong shipment figures despite global tariff barriers indicate underlying competitiveness in multiple Indian sectors.
- Policy validation: Government export-promotion measures and market diversification efforts are showing results in the latest data.
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