India’s merchandise trade deficit narrowed significantly to $24.53 billion in November, helped by a sharp decline in imports of gold, crude oil and coal, according to government export and import data released on Monday.
The November figure came in well below market expectations. Economists polled by Reuters had forecast a trade deficit of around $32 billion, compared with a record high of $41.68 billion in October.
The improvement was largely driven by lower global commodity prices and moderated domestic demand for bullion and energy products, which reduced the overall import bill. Export performance, however, remains under pressure amid global trade uncertainties and weakening external demand.
To cushion the economy from the impact of steep US tariffs, the Central government has rolled out a series of measures, including consumer tax cuts, an export promotion package and labour reforms, aimed at boosting competitiveness and supporting manufacturing and shipments overseas.
Trade relations with the United States remain a key focus area. Prime Minister Narendra Modi spoke with US President Donald Trump last week, following a visit by a US trade delegation to New Delhi, as India seeks relief for its key export sectors affected by higher tariffs.
At the same time, Washington is pressing India to lower tariff and non-tariff barriers on American goods and to open its market further to US agricultural products, including soybean and grain sorghum.
Economists said the sharp contraction in the trade deficit provides short-term relief to India’s external balance, but sustained improvement will depend on a revival in exports and clarity on global trade negotiations in the coming months.