Economists had expected the country’s November trade deficit to be $23.9 billion, according to a Reuters poll.
Earlier in October, India’s merchandise exports stood at $39.2 billion, while imports were $66.34 billion.
India’s merchandise trade deficit widened to a ten-month high of $29.65 billion in August.
For the first six months of 2024-25, goods exports were 1% higher whereas imports were up 6.1%.
Commerce Minister Piyush Goyal recently expressed confidence in India’s goods and services exports crossing $800 billion this fiscal despite global challenges.According to trade experts, a deficit is not always bad, if a country is importing raw materials or intermediary products to boost manufacturing and exports. However, it puts pressure on the domestic currency.Economic think tank Global Trade Research Initiative (GTRI) said that a bilateral trade deficit with a country isn’t a major issue unless it makes us overly reliant on that country’s critical supplies. However, a rising overall trade deficit is harmful to the economy.
India has been recording sustained trade deficits since 1980 mainly due to the strong imports growth, particularly of mineral fuels, oils and waxes and bituminous substances and pearls, precious and semi-precious stones and jewellery. In recent years, the biggest trade deficits were recorded with China, Switzerland, Saudi Arabia, Iraq and Indonesia. India records trade surpluses with the US, United Arab Emirates, Hong Kong, United Kingdom and Vietnam.
Meanwhile, India and Britain will resume their talks on a free trade agreement by the end of January. The countries have held start-stop talks over the agreement for two years. British Prime Minister Keir Starmer’s office had said last month that talks would be restarted in the “new year”.