India’s trade deficit reduced.
In the month of November, a relief news related to India’s foreign trade has come to light. According to government data, the country’s merchandise trade deficit has declined to $24.53 billion, which is the lowest level in the last five months. There were two major reasons behind this improvement, on one hand India’s exports to America increased, while on the other hand the imports of gold, crude oil and coal decreased.
Figures were better than expected
Economists had estimated the trade deficit in November to be around $32 billion, but the actual figures turned out to be much better than this. Earlier in October, trade deficit had reached a record level of $ 41.68 billion. November figures have indicated that India’s export sector is gradually gaining strength.
Tremendous jump in exports from India to America
In November, India’s merchandise exports to America increased by about 10 percent month-on-month to reach about $6.92 billion. If seen on annual basis, this increase was more than 21 percent. This shows that despite heavy tariffs, demand for Indian products remains in the US market.
Commerce Secretary Rajesh Aggarwal also expressed confidence in this and said that India has maintained its strong hold in exports to America.
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Major reason for decline in imports
India’s total imports declined to $62.66 billion in November, which was $76.06 billion in October. This decline in imports was mainly seen due to less purchase of gold, crude oil and coal. This helped in controlling the trade deficit to a great extent.
Improvement in total exports also
India’s total merchandise exports increased to $38.13 billion in November, whereas it was $34.38 billion in October. This indicates that despite global challenges, Indian exporters have performed better.
Impact of government’s steps visible
The central government has taken several steps to reduce the impact of heavy American tariffs. These include decisions like consumer tax cuts, export promotion schemes and labor reforms. The effect of these policies is now visible in the figures. Recently, Prime Minister Narendra Modi had also talked to the American President after the visit of the American Trade Delegation, so that the essential export sectors could get relief.
Service sector becomes strong support
Apart from merchandise trade, the service sector also kept India’s position strong. Services exports in November are estimated to be around $35.86 billion, while imports were estimated at $17.96 billion. This created a surplus of approximately $17.9 billion in services trade.