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India's December Trade Deficit Widens Amid Export Slowdown
16 Jan
Summary
- India's goods trade deficit widened to $25 billion in December.
- Export growth slowed to 1.9% in December from 19.4% in November.
- Services exports contracted 4% in December due to high base.
India's goods trade deficit saw a notable expansion in December, reaching $25 billion, up from $20.6 billion in the same month last year. This widening occurred as the country's export growth decelerated significantly to 1.9%, a sharp contrast to the 19.4% growth recorded in November. Exports to the United States, a key market, experienced a marginal decline of 1.8% in December, partly influenced by recent tariffs.
Concurrently, services exports contracted by 4% in December, a decrease attributed to a high base from the previous year. Despite this, services imports also declined, resulting in a services trade surplus of $18.1 billion. Officials highlighted government initiatives and trade diversification strategies, such as deepening ties with West Asia and Europe, as crucial for maintaining positive growth trajectories.
Overall, merchandise imports grew by 8.8% in December. For the April-December period of the fiscal year, goods exports increased by 2.4%, propelled by sectors like electronics and pharmaceuticals. The government anticipates total goods and services exports to exceed $850 billion for the current fiscal year, signaling resilience amid global trade volatility.
