India’s November Trade Deficit Narrows to Five-Month Low; Exports to US Rebound

India’s merchandise trade deficit narrowed to $24.53 billion in November, the lowest level in five months, reflecting a sharp contraction in imports alongside a sequential recovery in exports, according to data released by the Commerce Ministry on Monday.

Merchandise exports rose to $38.13 billion in November from $34.38 billion in October, while imports declined sharply to $62.66 billion from $76.06 billion in the previous month. The fall in the import bill was driven primarily by lower shipments of gold, crude oil, petroleum products and coal, categories that account for a substantial share of India’s merchandise imports.

Gold imports registered a steep 59% year-on-year contraction, while imports of petroleum, crude and related products fell by over 11% from a year earlier. Coal imports also declined on a year-on-year basis, contributing materially to the month-on-month compression in the trade deficit.

On the export side, November saw gains across several key sectors. Engineering goods exports rose to $11.01 billion, nearly 24% higher than a year earlier, while electronic goods exports increased to $4.81 billion. Shipments of gems and jewellery, drugs and pharmaceuticals, and petroleum products also recorded year-on-year growth. Non-petroleum and non-gems exports stood at $31.56 billion during the month, compared with $26.35 billion a year earlier.

Exports to the United States increased both sequentially and on an annual basis. Shipments to India’s largest export market rose nearly 10% month-on-month to $6.98 billion in November and were more than 22% higher than a year earlier. This followed a year-on-year decline in October, when exports to the US had fallen to $6.31 billion.

“Even without final product-level data for November, the likely explanation is higher exports of tariff-exempt or less-affected items such as smartphones, pharmaceuticals and petroleum products,” Global Trade Research Initiative founder Ajay Srivastava said.

For the April–November period, merchandise exports rose 2.62% to $292.07 billion, while imports increased 5.59% to $515.21 billion. The cumulative merchandise trade deficit widened to $223.14 billion from $203.33 billion in the same period last year, reflecting faster growth in imports relative to exports over the eight months.

The government has introduced measures such as consumer tax reductions, export promotion support and labour reforms to limit the impact of higher US tariffs on select products. Prime Minister Narendra Modi held discussions with US President Donald Trump last week following the visit of a US trade delegation, as New Delhi seeks relief on key export items.

The GTRI said New Delhi now has a credible case to press the United States for an immediate cut in tariffs from 50% to 25%, particularly after India sharply reduced imports of Russian crude, addressing a key US concern. It argued that India should not agree to diluting data-protection laws, allowing inventory-based e-commerce models, or opening the door to genetically modified agricultural imports, noting that export recovery strengthens leverage rather than justifying concessions. On the domestic front, it said the government should notify specific export schemes under the Export Promotion Mission.