India trade deficit narrows to 5-month low; official says close to framework deal with US
Merchandise exports to the US rises nearly 10% month on month to US$6.9 billion in November
[NEW DELHI] India’s merchandise trade deficit declined to a five-month low of US$24.5 billion in November. This was driven by a fall in gold, oil and coal imports, while exports to the US picked up, based on government trade data released on Monday (Dec 15).
Economists had expected the November trade deficit to be US$32 billion, based on a Reuters poll, compared to a record deficit of US$41.7 billion in October.
Merchandise exports to the US rose nearly 10 per cent month on month to US$6.9 billion in November.
“India has held fort on the US exports despite tariffs,” said Rajesh Agrawal, India’s commerce secretary.
Agrawal said that India and the US were close to finalising a “framework” agreement, but declined to specify a timeline.
“There’s a fair expectation that both countries will be able to agree to a deal to lower reciprocal tariffs... We are positively engaged with the US to see if we can close it sooner than later,” he said.
A team led by Agrawal met US deputy trade representative Rick Switzer in Delhi last week to discuss bilateral trade, including talks on a proposed trade pact.
The talks come after exports to the US fell nearly 9 per cent year on year to US$6.3 billion in October, though they were higher than US$5.5 billion in September.
Exports to US rebound
India’s overall merchandise exports rose to US$38.1 billion in November from US$34.4 billion in October, while imports fell to US$62.7 billion from US$76.1 billion.
Merchandise exports to the US, India’s largest export market, rose over 21 per cent year on year in November, compared to US$5.7 billion a year earlier.
Indian Prime Minister Narendra Modi’s administration has rolled out measures including consumer tax cuts, an export promotion package and labour reforms to cushion the economy from the impact of steep US tariffs.
Modi spoke with US President Donald Trump last week.
While New Delhi seeks relief on key export lines, Washington is pushing India to lower tariffs and non-tariff barriers on US goods and open its market to American farm products, including soybean and grain sorghum.
The government data showed that November’s services exports are estimated at US$35.9 billion and imports at US$18 billion, suggesting a services trade surplus at US$17.9 billion, based on a Reuters calculation.
India’s central bank releases detailed monthly services trade data about two weeks after the government’s initial estimates. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
