NEW DELHI: India’s merchandise trade deficit widened slightly to $25.04 billion in December as imports rose, while exports to the world’s largest consumer market remained firm despite tariff hikes.
U.S. President Donald Trump’s decision to double tariffs to 50% on certain Indian goods from late August has hit shipments of products such as textiles, chemicals and some food items, though overall exports have since stabilised.
“U.S. exports have grown on-year in the first nine months of the (fiscal) year,” Rajesh Agrawal, commerce secretary, told reporters, adding total exports could be more than $850 billion in the current fiscal year ending March.
Merchandise exports to the United States edged down to $6.89 billion in December from $6.92 billion in November.
However, shipments to the U.S. rose 9.75% year-on-year to $65.88 billion in the first nine months of the fiscal year, data showed.
Indian and U.S. leaders are holding discussions for a bilateral trade deal, after the negotiations collapsed last year amid a breakdown in communication between the two governments.
India trade deficit narrows to 5-month low, official says close to framework deal with US
Agrawal said negotiating teams are talking “virtually” and that discussions have not broken down.
“(I) can’t put a deadline to the U.S. deal, will happen when both sides are ready,” he said.
India’s Foreign Minister Subrahmanyam Jaishankar said on Tuesday he held talks on trade, critical minerals and energy with U.S. Secretary of State Marco Rubio.
EXPORTS REMAIN FIRM
India’s merchandise exports rose to $38.51 billion in December from $38.13 billion in November, while imports rose to $63.55 billion from $62.66 billion.
The country’s push to diversify exports toward China, Russia and the Middle East, backed by incentives and planned trade pacts, including with the EU, has cushioned shipments after Trump raised tariffs in late August.
December merchandise trade deficit was lower than economists’ forecast of $27 billion, but higher than the deficit of $24.53 billion in the previous month.
Government data showed December services exports were estimated at $35.50 billion and imports at $17.38 billion, suggesting a services trade surplus of $18.12 billion, according to Reuters calculations.
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