(MENAFN- KNN India)
New Delhi, Jan 16 (KNN) India's merchandise trade deficit contracted to USD 21.94 billion in December from November's record USD31.86 billion, primarily driven by halved Gold imports of USD 4.7 billion, according to data released by the commerce department on Wednesday.
The narrowing deficit comes amid a significant downward revision of previous trade figures and mixed performance across export sectors.
December saw merchandise exports decline by 1 percent year-on-year to USD 38.01 billion, reflecting ongoing global geopolitical tensions.
However, electronics exports emerged as a bright spot, surging 35.11 percent to reach a 24-month high of USD 3.58 billion. Imports grew by 4.9 percent year-on-year to USD 59.95 billion but showed a 6 percent decrease from November's revised figures.
The commerce department announced substantial revisions to earlier trade data, including a USD 17.5 billion downward adjustment in import figures for April-November 2024.
This correction primarily stemmed from modifications to gold import data, which was revised downward by USD 11.7 billion following the discovery of double-counting errors in warehouse shipments.
Commerce Secretary Sunil Barthwal indicated that a new standard operating procedure is being developed to enhance coordination between commerce and revenue departments for more accurate data reconciliation.
Despite the overall decline, several import categories showed growth in December, with electronics rising 9.6 percent, petroleum products up 2.2 percent, and machinery increasing 11.75 percent.
On the export front, while petroleum and gems and jewellery sectors experienced significant declines, core sectors demonstrated resilience with engineering goods, pharmaceuticals, and readymade garments all showing positive growth.
The services sector maintained its positive trajectory, with exports growing 3.2 percent year-on-year to USD 32.66 billion and imports rising 11.9 percent to USD 17.5 billion in December, resulting in a services trade surplus of USD 15.16 billion.
ICRA's Chief Economist Aditi Nayar projects a favorable current account deficit outlook, estimating it at 2.0 percent of GDP for Q3FY25 and around 1 percent for the full fiscal year, aided by the recent trade deficit reduction and data revisions.
Cumulatively, for the April-December period, merchandise exports showed modest growth of 1.6 percent, reaching USD 321.71 billion, while imports rose 5.1 percent to USD 532.48 billion.
The government continues its comprehensive review of trade data, with the process expected to conclude next month, potentially impacting key macroeconomic indicators including GDP calculations.
(KNN Bureau)
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