India's Trade Deficit Expands in December as Imports Jump Sharply
India's merchandise trade deficit widened significantly in December. This increase came after a sharp rise in imports. Demand for Indian goods in the United States remained strong. This resilience persisted despite steep tariffs of fifty percent on most shipments.
Key Figures Show a Growing Gap
The goods trade deficit rose to twenty-five point zero four billion dollars in December. This figure is up from twenty-four point five three billion dollars in November. It also marks a substantial increase from twenty point six three billion dollars in December of the previous year, 2024. The Ministry of Commerce and Industry released this provisional data on Thursday.
Exports to the United States increased month-on-month in December. The US is India's largest overseas market. This growth indicates that demand held up well. Exporters faced higher tariffs, but they managed to maintain sales. However, these exporters also dealt with significant pricing and margin pressures.
Bilateral Trade with China Also Rises
Trade between India and China increased during this period. Imports from China rose sharply. Exports to China also showed improvement. This pattern reflects India's continued dependence on Chinese goods. The country relies on China for intermediate products and electronic items.
At the aggregate level, the combined trade position for merchandise and services deteriorated in December. This decline is measured from a year earlier. Total exports, which include both merchandise and services, slipped marginally. They fell to seventy-four point zero one billion dollars last month from seventy-four point seventy-seven billion dollars in December 2024.
Imports Surge Drives Overall Deficit
Total imports jumped to eighty point nine four billion dollars from seventy-six point twenty-three billion dollars. As a direct result, the overall trade deficit widened sharply. It reached six point nine two billion dollars from one point four six billion dollars a year earlier. The commerce ministry data clearly shows this expansion.
Merchandise exports rose to thirty-eight point five one billion dollars in December. This is up from thirty-seven point eighty billion dollars a year ago. Merchandise imports surged to sixty-three point five five billion dollars from fifty-eight point forty-three billion dollars. This surge reflects strong domestic demand for several key products.
Domestic demand remained robust for crude oil, electronics, and capital goods. These categories contributed significantly to the import increase.
Services exports eased to thirty-five point fifty billion dollars from thirty-six point ninety-seven billion dollars. Services imports declined marginally. They fell to seventeen point thirty-eight billion dollars from seventeen point eighty billion dollars.
The data paints a clear picture of India's trade dynamics in December. A surge in imports, coupled with resilient exports to the US, defined the month. The growing trade deficit highlights ongoing economic challenges and dependencies.
