India's Trade Deficit Widens as US Tariffs Bite

Michelle Reid

Data Interpretation

Political

Forex

Economic

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Summary:

India's December trade deficit widened to $25.04B, pressured by US tariffs, impacting the rupee and exporters.

India’s trade deficit widened in December as ongoing US tariffs continued to apply pressure on the country's exporters.

The latest figures from the Ministry of Commerce and Industry show the gap between imports and exports reached $25.04 billion last month. This figure aligns with the consensus forecast from economists surveyed by Bloomberg.

December Trade by the Numbers

The widening deficit was driven by a significant rise in imports alongside modest export growth.

• Imports: Rose by 8.8% year-on-year to $63.55 billion.

• Exports: Grew by 1.9% year-on-year to $38.51 billion.

Pressure Mounts on the Rupee and Exporters

An expanding trade deficit puts additional strain on the Indian rupee, which is already weakened by capital outflows and uncertainty surrounding a potential trade agreement with the United States.

India remains one of the few major economies that has not yet secured a trade deal with the US, despite extended negotiations. This delay is causing concern among exporters, particularly in labor-intensive industries. They have warned that further delays could jeopardize orders for the crucial US summer shopping season.

It is important to note that monthly trade data can be volatile, often influenced by the timing of shipments and customs processing.

To stay updated on all economic events of today, please check out our Economic calendar

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