India's Trade Deficit Widens to $25 Billion in December
India's trade deficit increased significantly in December, reaching $25 billion. This expansion came as imports grew faster than exports, highlighting ongoing challenges in global trade.
Import Growth Outpaces Exports
Imports surged by 9% to $63.6 billion during the month. Key drivers included electronics, fertiliser, and silver shipments. In contrast, exports rose by a more modest 1.9% to $38.5 billion.
The latest data from the commerce department shows a mixed picture. While some sectors performed well, others faced headwinds from international markets.
US Trade Figures Show Flat Growth
Exports to the United States remained nearly unchanged at $6.9 billion in December 2025. This compares to $7 billion in the same period a year earlier. Indian goods face a 50% tariff in the US market, which continues to impact trade flows.
Imports from the US increased by 7.6% to $4 billion. A sharp rise in oil shipments, jumping 40-50%, contributed significantly to this growth.
Commerce Secretary Expresses Optimism
Commerce Secretary Rajesh Agrawal addressed reporters about the trade numbers. He stated, "We have been holding well. We are in positive territory...Going forward, we hope that we will be in positive territory."
Agrawal projected that India could end the year with total exports exceeding $850 billion. This figure includes both goods and services. He noted that services exports are likely to cross the $400 billion mark for the first time.
Services Sector Sees Decline
In December, services exports fell by 4.2% to $37 billion. Services imports increased by 2% to $17.4 billion. This decline in services exports contrasts with the overall positive outlook for the sector.
Goods Exports Show Mixed Results
On the goods side, several sectors recorded increases in export value:
- Electronics
- Gems and jewellery
- Engineering products
- Apparel
However, exports of oil products declined due to lower global prices. This drop offset some of the gains from other sectors.
Industry Leaders Comment on Trade Performance
AEPC Chairman A Sakthivel discussed the apparel sector's performance. He said, "The Dec 2025 export performance showing a modest growth of 2.9% for the RMG sector reflects both the resilience and adaptability of our industry in a challenging global environment."
Sakthivel pointed out that demand in key markets like the US has been uneven. Inflationary pressures and geopolitical uncertainties have created challenges. Despite this, Indian apparel exporters have managed to hold ground through strategies like product diversification and improved compliance.
EEPC India Chairman Pankaj Chadha highlighted market diversification as a key growth driver. He also emphasized the need for government support. Chadha stated, "In the wake of persistent challenges, primarily stemming from Trump tariff and geopolitical tensions, there is greater need for govt support."
FIEO President SC Ralhan added his perspective on diversification. He noted, "Diversification is particularly critical at a time when global trade routes are being reshaped due to geo-political conflicts, sanctions, shipping disruptions and strategic realignments."
The trade data for December underscores the complex dynamics facing Indian exporters. While some sectors show resilience, broader economic factors continue to influence trade outcomes.
