(MENAFN- KNN India)
New Delhi, Dec 19 (KNN) India's merchandise trade performance showed significant uncertainty in recent months, with exports contracting by approximately 5 percent in November following a robust 17.2 percent growth in October, according to latest data from the Ministry of Commerce and Industry.
The trade deficit expanded to a record USD 37.84 billion, substantially exceeding the average deficit recorded during April-October of this year, suggesting an upward revision in full-year current account deficit projections.
A detailed analysis reveals that while overall exports declined, non-oil exports demonstrated resilience with 7.7 percent growth in November. Electronic and engineering goods sectors showed particular strength, registering growth rates of 54 percent and 13.75 percent respectively.
However, imports surged by 27 percent, primarily driven by an extraordinary increase in gold imports, which reached USD 14.9 billion compared to USD 3.4 billion in the previous year, marking a nearly 50 percent increase year-to-date.
Other commodity imports displayed mixed trends, with crude oil imports recovering from October's 12-month low, while iron and steel imports experienced a sharp decline.
The services sector showed promising signs, with preliminary estimates indicating services exports surpassing merchandise exports in November, though these figures await confirmation from the Reserve Bank of India.
The global trade outlook faces mounting uncertainties, particularly concerning U.S. trade policy under President-elect Donald Trump, who has indicated intentions to raise tariffs on several countries.
Trump's recent criticism of India's tariff structure, specifically highlighting the 100 percent rate on certain products, raises concerns about potential reciprocal taxes on Indian exports.
This development is particularly significant given India's previous loss of duty-free access under the Generalised System of Preferences programme during Trump's first presidency, which affected USD 5.7 billion worth of exports.
The evolving trade landscape presents India with the challenge of carefully managing its trade negotiations with the incoming U.S. administration while addressing its growing trade imbalances.
The combination of uncertain export performance, surging gold imports, and potential changes in U.S. trade policy underscores the complex external sector challenges facing Indian policymakers.
(KNN Bureau)
MENAFN19122024000155011030ID1109010953
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.