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Trade Deficit Widens to $22 billion in December
- The Economic Times |
- Economics (Macroeconomics) |
- 2025-01-16
- Gold imports
- trade deficit
India's trade deficit increased to $21.94 billion in December 2023 from $18.76 billion the previous year, amid a contraction in merchandise exports. Gold imports reached $4.7 billion, with overall imports rising by 5%. Key export sectors like petroleum declined, affecting trade balance improvements.
India's Trade Deficit and Export-Import Overview
India's trade deficit for December widened to $21.94 billion, compared to $18.76 billion in the previous year, with merchandise exports contracting for the second consecutive month, showing a 0.99% year-on-year decline to $38.01 billion.
- Gold imports in December were valued at $4.7 billion.
- Merchandise trade deficit showed a reduction compared to November.
- The government's revision of November's gold import values, due to a double counting issue, brought down the trade deficit to $32.8 billion from an earlier $37.8 billion.
- December 2023 saw gold imports worth $3 billion, with overall imports increasing by 5% year-on-year to $59.95 billion.
Export Growth and Challenges
Commerce Secretary Sunil Barthwal expressed optimism about export growth, suggesting that exports could exceed $800 billion, with current figures nearing $200 billion per quarter.
- India's goods and services exports for October-December totaled $208 billion.
- Key sectors like petroleum, gems and jewellery, and chemicals saw a contraction in December.
- Pertinent challenges included commodity and metal price volatility, trade disruptions, and geopolitical tensions affecting logistics.
Specific Export Sector Insights
- Petroleum product exports fell by 28.62% in December, with a 20.84% decline year-on-year for the fiscal year-to-date.
- Electronics goods exports reached a 24-month high of $3.5 billion in December.
- Readymade garments exports grew by 12.8%, reaching $1.46 billion.
International Trade Agreements
India is actively engaging in discussions to strengthen international trade agreements.
- Talks with the UK on a proposed foreign trade agreement are scheduled for early February.
- Negotiations to review the free trade agreement with ASEAN commence on February 10 in Indonesia.
- The next round of FTA talks with the EU is scheduled for March 10-14 in Brussels.
- India and the Eurasian Economic Union, comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, are finalizing terms for a free trade agreement.