India’s trade deficit at $21.9 billion in December

India’s trade deficit widened in December from a year ago even as gold imports plunged by half during the month from the revised November figures, government data showed.

The gap between merchandise exports and imports in December was $21.94 billion, trade ministry data showed Wednesday, against the sharper deficit of $27.3 billion estimated by a Reuters poll.

Exports declined 1% in December to $38.01 billion from a year ago, while imports increased by 4.9% to $59.95 billion, the data showed.

India’s ministry of commerce had last week acknowledged a counting error in the import figures for precious metals for months, though it did not publish any revised data along with the December figures.

Gold imports last month were at $4.7 billion, half of the revised figure of $9.84 billion for November.

The government had lowered gold imports by $5 billion in November and by $11.7 billion in the April-November period.

The revision dragged down the trade deficit for April-November by $13.59 billion to $188.83 billion.

The demand for the precious metal had jumped after the government slashed customs duty to 6% from 15% in July.

Trade secretary Sunil Barthwal said “this year was challenging, globally,” though India has fared well during the period.

“That is the reflection of resilient exports we have built over a period of time,” he added.

India’s trade faces multiple headwinds amid geopolitical tensions, and a weakening rupee.

Donald Trump’s return to the White House next week is expected to throw global trade into disarray as the president-elect has vowed additional 60% tariffs on Chinese goods and 20% for the rest of the world.

Aggressive sanctions against Russian oil by the outgoing Joe Biden administration to skew the battlefield in Ukraine’s favor last Friday has led to a surge in oil prices, which will have a drastic impact India’s trade deficit.

India, which imports 90% of its oil demand, imported $15.2 billion worth of fuel in December, a 2.2% jump from the $14.9 billion worth of crude imported a year ago.

This week, China released data that showed its trade surplus rose to a record $1 trillion last year—a 20% leap from 2023 and almost matching India’s annual average trade of $1–$1.5 trillion.

Of this, China’s trade surplus with India has almost doubled from $57 billion in 2019 to $103 billion last year on surging exports and stagnant imports, according to a statement from that country’s customs administration.