India’s external trade position showed a strong improvement in November, with the merchandise trade deficit narrowing sharply to USD 24.53 billion, compared to USD 41.68 billion in October. The contraction was significantly better than economists’ expectations of around USD 32 billion, reflecting a combination of stronger exports and a meaningful pullback in imports.
What Drove the Improvement?
The key drivers behind this positive shift were:
- Robust export growth, particularly to the United States
- Lower imports of gold, crude oil, and coal
- A healthy surplus in services trade, which continues to cushion India’s overall trade balance
Merchandise Trade Snapshot – November vs October
| Indicator | October (USD bn) | November (USD bn) | Trend |
|---|---|---|---|
| Merchandise Exports | 34.38 | 38.13 | ▲ Strong increase |
| Merchandise Imports | 76.06 | 62.66 | ▼ Sharp decline |
| Trade Deficit | 41.68 | 24.53 | ▼ Significant narrowing |
Key Insight:
The steep fall in imports, combined with export recovery, resulted in one of the lowest trade deficits in recent months.
Export Momentum Strengthens, Led by the U.S.
Exports showed a notable rebound in November, rising to USD 38.13 billion, up from USD 34.38 billion in October.
- Exports to the U.S. increased nearly 10% month-on-month, reaching USD 6.92 billion
- On a year-on-year basis, exports to the U.S. were over 21% higher compared to November last year
- This underscores the growing importance of the U.S. market for Indian manufacturers and exporters
India’s Export Performance – Recent Months
| Month | Exports (USD bn) | MoM Change | YoY Comparison |
|---|---|---|---|
| November | 38.13 | +3.75 | +21% |
| October | 34.38 | — | -9% |
| September | 31.50 | +2.91 | +5% |
Trend Analysis:
- September–October saw uneven performance
- November marks a clear rebound, suggesting stabilisation and recovery in global demand, especially from developed markets
Services Trade Continues to Provide Stability
India’s services sector once again played a crucial balancing role.
| Services Trade (November) | USD bn |
|---|---|
| Services Exports | 35.86 |
| Services Imports | 17.96 |
| Services Trade Surplus | ~17.9 |
The strong services surplus significantly offsets the merchandise trade gap, reinforcing India’s position as a global services hub.
Annual Context: Exports Remain Resilient
- Total merchandise exports (FY 2023–24): ~USD 437.07 billion
- March 2024 exports: ~USD 30 billion
- YoY growth in March: 18.6%
Despite global headwinds, India’s export sector has demonstrated resilience and adaptability, supported by diversification of markets and products.
Conclusion
November’s data points to a positive inflection in India’s trade balance, driven by:
- Rising exports, especially to the U.S.
- Import moderation in key commodities
- Sustained strength in services exports
If this trend continues, India could see greater stability in its external accounts in the coming months—an encouraging signal for exporters, logistics providers, and global trade stakeholders alike.
Source: The Economic Times
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