India’s merchandise trade deficit narrowed sharply to a five-month low in November, aided by a fall in imports and a rise in exports, while the government said it is close to finalising a framework trade agreement with the United States, according to official data and statements.
The trade deficit stood at $24.53 billion in November, significantly lower than $41.68 billion recorded in October, marking the lowest level in five months. The improvement was largely driven by a decline in imports of key commodities such as gold, crude oil and coal, officials said.
India’s exports rose to $38.13 billion in November, up from $34.38 billion in the previous month, indicating a recovery in outbound shipments after recent months of pressure due to global economic uncertainties.
Exports to the United States, India’s largest trading partner, showed notable growth. Shipments to the US increased nearly 10% on a month-on-month basis and were more than 21% higher year-on-year, reflecting stronger demand and improving trade momentum.
Amid the improving trade numbers, Commerce Secretary Rajesh Agrawal said India and the United States are close to concluding a framework trade deal following recent bilateral discussions held in New Delhi. The talks included meetings with US Deputy Trade Representative Rick Switzer.
While the official did not provide a specific timeline, he said there is a “fair expectation” that the framework agreement could pave the way for reductions in reciprocal tariffs on select goods and help address long-standing trade irritants between the two countries.
Economists say the narrowing trade deficit could ease pressure on India’s external accounts at a time when global commodity prices remain volatile and financial markets are sensitive to capital flows.
Progress on a US-India trade framework is also being closely watched by investors, as it could boost exports, improve market access for Indian products and strengthen overall bilateral economic ties in the coming months.
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