India’s latest trade numbers show a mixed picture, with exports staying in positive territory while imports climbed at a much faster pace.
The data points to steady demand for some Indian goods overseas, even as key exporters continue to face obstacles in the US market.
December also underlined how quickly the trade balance can shift when import bills rise faster than export earnings.
With the trade deficit widening again, the focus is now on what this trend could mean for the rupee at a time when investors are watching capital flows and the pace of trade negotiations closely.
Export growth steadies after a strong November
India’s exports rose 1.9% in December from a year earlier to $38.51 billion, according to data released by the Ministry of Commerce and Industry on Thursday.
The increase marked the second consecutive month of growth.
However, it followed a much sharper jump in November, when exports climbed 19.4%, the fastest pace in more than three years.
The latest release shows export momentum remains intact, but at a more moderate level compared with the previous month.
New markets help soften global turbulence
The ministry data suggested India’s export resilience has been supported by its stronger push into markets in the Middle East and North Africa.
This shift has helped exporters manage uncertainty in global trade conditions.
Commerce Secretary Rajesh Agrawal told reporters in New Delhi that India’s exports have held up well despite global turmoil.
He also pointed to strong performance in sectors such as electronics, pharmaceuticals, and engineering.
US tariffs remain a key hurdle for labour-heavy sectors
The trade figures arrive as India continues to negotiate with the US, one of the few major economies yet to finalise a trade deal with Washington despite months of discussions.
The US has targeted India with tariffs of 50%, among the highest in the world, partly linked to India’s purchases of Russian oil.
Exporters in labour-intensive industries have warned that a longer delay in reaching a deal could hit demand and cost them orders tied to the US summer shopping season.
Import jump widens deficit and adds rupee pressure
Imports rose more sharply than exports in December, climbing 8.8% from a year earlier to $63.55 billion.
With inbound shipments increasing faster than outbound trade, India’s trade deficit widened.
The deficit expanded to $25.04 billion in December, compared with $24.53 billion a month earlier.
A widening gap between imports and exports could add pressure on the already weak rupee, which has been weighed down by capital outflows and uncertainty about the timing of a potential US trade deal.
At the same time, the government has cautioned that monthly trade data can be volatile.
Shifts in shipment timings and customs clearance can affect the final numbers, which means month-to-month changes may not always reflect a lasting trend.
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