India trade deficit narrows to 5-month low, official says close to framework deal with US

NEW DELHI: India’s merchandise trade deficit declined to a five-month low of $24.53 billion in November, driven by a fall in gold, oil and coal

imports, while exports to the U.S. picked up, government trade data released on Monday showed.

Economists had expected the November trade deficit to be $32 billion, according to a Reuters poll, compared to a record deficit of $41.68 billion in the previous month.

Merchandise exports to the U.S. rose nearly 10% month-on-month to $6.92 billion in November.

“India has held fort on the U.S. exports despite tariffs,” Rajesh Agrawal, India’s commerce secretary told reporters.

Agrawal said that India and the U.S. were close to finalising a “framework” agreement but declined to specify a timeline.

“There’s a fair expectation that both countries will be able to agree to a deal to lower reciprocal tariffs…We are positively engaged with the U.S. to see if we can close it sooner than later,” he said.

A team led by Agrawal met U.S. Deputy Trade Representative Rick Switzer in Delhi last week to discuss bilateral trade including talks on a proposed trade pact.

India’s current account deficit moderates in Sept quarter as trade gap narrows

The talks come after exports to the U.S. fell nearly 9% year-on-year to $6.31 billion in October, though they were higher than $5.47 billion in September.

EXPORTS TO US REBOUND

India’s overall merchandise exports rose to $38.13 billion in November from $34.38 billion in October, while imports fell to $62.66 billion from $76.06 billion.

Merchandise exports to the U.S., India’s largest export market, rose over 21% year-on-year in November, compared to $5.71 billion a year earlier.

Indian Prime Minister Narendra Modi’s administration has rolled out measures including consumer tax cuts, an export promotion package and labour reforms to cushion the economy from the impact of steep U.S. tariffs.

Modi spoke with U.S. President Donald Trump last week.

While New Delhi seeks relief on key export lines, Washington is pushing India to lower tariffs and non-tariff barriers on U.S. goods and open its market to American farm products, including soybean and grain sorghum.

The government data showed November services exports are estimated at $35.86 billion and imports at $17.96 billion, suggesting a services trade surplus at $17.9 billion, according to Reuters calculation.

India’s central bank releases detailed monthly services trade data about two weeks after the government’s initial estimates.