India's trade deficit narrows to five-month low of $24.53 bn in November

India’s merchandise trade deficit narrowed to a five-month low of $24.53 billion in November, as exports grew at their fastest pace in 41 months, while imports slowed to a three-month low led by a sharp contraction in gold imports, data released by the Commerce Department showed. 

The trade deficit narrowed from a record high of $41.68 billion in October and $31.93 billion in November last year.

 

Exports rose to an eight-month high of $38.13 billion in November, registering 19.38 per cent year-on-year, despite ongoing geopolitical uncertainties and the imposition of steep tariffs by the United States (US). The growth was driven by a combination of factors including a favourable base, expectation of a trade deal with the US and the depreciation of the rupee against the US dollar.

   

Exports to India’s largest export destination — the US — witnessed 22.45 per cent growth to $6.98 billion in November. On a sequential basis, outbound shipments to the US saw 10.62 per cent growth from $6.31 billion. The growth came amid anticipation among exporters that the much-awaited trade deal between both countries will be finalised ‘soon’.

 

Commerce Secretary Rajesh Agrawal said that India has held fort in the case of exports to the US despite tariffs. He further said that the tariff imposed by the US on several Indian products is 30 per cent higher than for several competitor nations, especially in the case of labour-intensive sectors.

 

“It is good that many exporters have been able to hold on to their supply chains. There is a fair expectation on each side that both countries will be able to finalise a deal sooner or later. Let’s try to see how it goes in the next few months,” Agrawal told reporters in a briefing on Monday.

 

Services exports saw 11.67 per cent growth at $35.86 billion in November, while services imports grew by 4.11 per cent to $17.96 billion, resulting in a surplus of $17.9 billion. Services trade data for November, however, is an “estimate”, which will be revised based on the Reserve Bank of India’s subsequent release, the Commerce Department clarified.

 

Inbound merchandise shipments into the country saw a 1.88 per cent contraction to an all-time high of $62.66 billion in November, mainly due to a decline in inbound shipments of petroleum products, gold, vegetable oil and coal.

 

Gold imports saw a 59.15 per cent year-on-year decline at $4.02 billion. Petroleum imports recorded an 11.27 per cent contraction to $14.11 billion due to a fall in oil price. Vegetable oil imports also fell by nearly a fifth to $1.5 billion. Similarly, inbound shipments of coal, coke and briquettes also contracted 5.7 per cent to $2.25 billion in November.

 

Other than the US, outbound shipments soared to countries such as China (90 per cent), Hong Kong (35.53 per cent), Spain (181.22 per cent), the United Arab Emirates (13.16 per cent) and France (65.73 per cent). 

Non-petroleum and non-gems and jewellery exports, an indication of exports’ health, grew by nearly a fifth to $31.56 billion in November.

 

The non-petroleum sectors that drove the growth include engineering goods (23.76 per cent), drugs and pharmaceuticals (20.91 per cent), organic and inorganic chemicals (18.49 per cent), and readymade garments grew 11.27 per cent during the month. Gems and jewellery exports saw 27.8 per cent growth while petroleum exports saw an 11.65 per cent jump.

 

Aditi Nayar, chief economist at ICRA, said that with a normalisation of supply after the holidays, and demand post the festive season, merchandise exports rose and imports declined sharply, compressing the trade deficit to a five-month low.

 

“With the fall in gold imports in November 2025, the YTD imports in FY26 ($45.3 billion) are only slightly higher than in FY25 ($43.8 billion), amidst the sharp rise in prices. With the increase in the average merchandise trade deficit in October-November, we estimate the current account deficit to widen to $20–24 billion in Q3 FY26 from $11–12 billion each in Q3 FY25 and Q2 FY26,” Nayar said. 

SC Ralhan, president, Federation of Indian Export Organisations (FIEO), said diversification of export markets, along with the continued resilience of several key sectors, has played a crucial role in supporting export growth.

 

During April–November 2025, the United States remained India’s top export destination, despite the imposition of a high tariff of 50 per cent — clearly demonstrating the resilience and adaptability of India’s exporting community, Ralhan said.