India's merchandise trade deficit contracted to $19.8 billion in December from $20.6 billion in November, according to Reuters' calculations based on export and import figures given by the government on Monday.
India's trade deficit in December 2022 stood at $23.14 billion.
A Reuters survey indicated that analysts had forecast India's trade deficit for December to be $21 billion.
India’s exports in December stood at $38.45 billion, up from $38.08 bn seen in the same month last year. Imports reduced to $58.25 billion in December 2023 from $61.22 billion registered in December 2022.
Briefing reporters on the data, Commerce Secretary Sunil Barthwal said that despite a global slowdown, "we are in the positive zone and the trade deficit has also come down".
The exports are struggling on account of demand slowdown in Western countries, besides geopolitical tensions.
The Red Sea crisis will also hurt exports in the coming months as exporters are holding up consignments.
India's merchandise exports have lingered in the last several months except for October.
"The whole globe is facing an adverse condition. Globally the picture is quite bad, but India is doing well. We hope to beat the global trends in the January-March quarter also. Yes, we are waiting and watching what is happening in the Red Sea," he told reporters here and expressed confidence that the country's goods and services exports would cross last year's figure of USD 776 billion.
He added that the Red Sea crisis would have an impact on exports on account of increase in transportation cost. The ministry is holding an inter-ministerial meeting to take stock of the situation.
The situation around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, has escalated due to attacks by Yemen-based Houthi militants.
Due to these attacks, the shippers are taking consignments through the Cape of Good Hope, resulting in delays of almost 14 days and also higher freight and insurance costs.
The commerce ministry has also asked the ECGC not to increase the export credit interest rates.
Source Name : Economic Times