India's trade deficit widens to $32.8 bn in Nov

India's merchandise trade deficit in November widened to $32.84 billion from $27.1 billion in October, as the nation’s import bill ballooned and exports declined.

The government had earlier reported in December last year that India’s trade deficit widened to an all-time high of $37.84 billion. The data has now been revised as the government cut its November gold import estimates by an unprecedented $5 billion, the largest revision for any commodity in history.

Data for November gold imports was revised to $9.84 billion, from the $14.86 billion announced last month.


India's merchandise exports increased by 2.17% year-on-year in the April to November period, the government data showed, while imports rose at a higher pace of 8.35%, widening the country's trade deficit.

India's merchandise exports in November stood at $32.11 billion. After the $5 billion revision in November's gold imports, the total imports have come down to $64.95 billion from the earlier released figure of $69.95 billion.

In the previous month, merchandise exports were at $39.2 billion and imports stood at $66.34 billion.

The government had earlier reported in December last year, that India’s trade deficit widened to an all-time high of $37.84 billion. The data has now been revised as the government cut its November gold import estimates by an unprecedented $5 billion, the largest revision for any commodity in history.

In October, the merchandise trade deficit stood at $27.14 billion.

The fall in petroleum exports pulled down the November goods exports, Sunil Barthwal, Commerce Secretary, said at a press briefing. Petroleum exports fell due to price effect, he added.

Economists had expected the country's November trade deficit to be $23.9 billion, according to a Reuters poll.

A widening trade deficit may put further pressure on India’s currency, which weakened 0.5% against the dollar last month, marking its worst month since March.

According to trade experts, a deficit is not always bad, if a country is importing raw materials or intermediary products to boost manufacturing and exports. However, it puts pressure on the domestic currency.

Economic think tank Global Trade Research Initiative (GTRI) said that a bilateral trade deficit with a country isn't a major issue unless it makes us overly reliant on that country's critical supplies. However, a rising overall trade deficit is harmful to the economy.

India has been recording sustained trade deficits since 1980 mainly due to the strong imports growth, particularly of mineral fuels, oils and waxes and bituminous substances and pearls, precious and semi-precious stones and jewellery. In recent years, the biggest trade deficits were recorded with China, Switzerland, Saudi Arabia, Iraq and Indonesia. India records trade surpluses with the US, United Arab Emirates, Hong Kong, United Kingdom and Vietnam.

Meanwhile, India and Britain will resume their talks on a free trade agreement by the end of January. The countries have held start-stop talks over the agreement for two years. British Prime Minister Keir Starmer's office had said last month that talks would be restarted in the "new year".