Exports dipped 1% in December, trade gap eased from November’s record high

India's December trade data shows a narrowing trade deficit, with concerns over export blip addressed by officials.

India’s goods exports contracted 1% year-on-year in December to a fraction over $38 billion, while imports grew 4.9% to almost $60 billion, but this narrowed the merchandise trade deficit to a three-month low of $21.9 billion, reflecting a sharp moderation from November’s record gap of $31.8 billion.

Gold imports which were feared to have spiked to a fresh high of $14.9 billion in November, before the Centre corrected that tally by $5 billion last week to $9.9 billion citing an erroneous ‘double count’, more than halved sequentially in December to $4.7 billion. However, this still marked a significant 55.4% increase over the yellow metal’s December 2023 imports.

Commerce Secretary Sunil Barthwal sought to play down concerns about the export blip, saying that shipment values have grown in every quarter through the first nine months of this financial year. This shows that they have not only been resilient during a challenging year but also more consistent, he said. Officials also stressed that December’s export tally marked only the third occasion in 2024-25 that outbound shipments’ value has crossed the $38 billion mark.

Overall goods exports are now estimated to be 1.6% higher through the April to December 2024 period at $321.7 billion, while imports have risen 5.15% to $532.5 billion. On a year-on-year basis, December’s trade deficit was 17% higher, while the total deficit through the year is up 11.1% at $210.8 billion.

Petroleum imports rose 2.2% to $15.3 billion last month, but petroleum product exports tanked a sharp 28.6%, to just $4.9 billion. Through April to December 2024, exports of petro products were 20.84% lower at a little over $49 billion, while imports rose 6.4% to $138.31 billion.

Mr. Barthwal noted that this is largely owing to a 20% decline in petroleum prices over this period, pointing out that non-petroleum exports have been rising consistently. Excluding petroleum trade, India’s exports were up 5.05% in December, and 7.05% higher through the April to December 2024 period, officials pointed out.

Exporters were not as sanguine, even though they attributed part of December’s export dip to volatile commodity and metal prices, as well as currency fluctuations and logistical challenges affecting export flows to key markets like Europe, Africa, and the Commonwealth of Independent States (CIS).