India's Merchandise Exports Grow 1.8% Year-on-Year Despite Steep US Tariffs
New Delhi: Despite global economic uncertainties and ongoing tariff negotiations with the United States, India’s merchandise exports increased 1.8% year-on-year to USD 38.51 billion in December, according to data released by the commerce department, reported by Business Standard.
As per the report, inbound shipments grew 8.8% to USD 63.55 billion. The trade deficit, however, widened to USD 25 billion, compared with USD 20.63 billion in December 2024.
Given the trade uncertainties with Washington, exports to the US contracted 1.8%, year-on-year, to USD 6.89 billion in December.
However, cumulatively, from April to December, outbound shipments to the US stood at USD 65.87 billion, marking 9.7% growth compared to the same period last year.
Speaking to reporters during a briefing on Thursday (January 15), commerce secretary Rajesh Agrawal said that India has managed to “hold on well” in exports to the US despite the imposition of 50% tariffs affecting 55% of exports.
“One of the key reasons has been electronics exports to the US, as they are not covered under the additional tariffs. Going forward, we hope to remain in positive territory,” Agrawal was quoted as saying by Business Standard.
He also noted that during the April-December period, cumulative merchandise exports rose 2.44% to USD 330.29 billion, PTI reported.
This fiscal, exports of goods and services are likely to cross USD 850 billion, he added.
He acknowledged that the steep US tariffs will continue to “stress” sectors such as textile and leather, noting that it was thus important to “reduce dependence on one particular geography”.
A good marker of export health, non-petroleum and non-gem and jewellery exports grew 3.42% to USD 32 billion in December. Other key sectors that registered growth in December includes electronic goods (16.78%), marine goods (11.73%), drug and pharmaceutical (5.65%), readymade garment (2.89%), engineering goods (1.28%), and organic and inorganic chemicals (1.08%).
On services exports, the commerce department data found a contraction of 3.97% to USD 35.5 billion in December, mainly due to a high base, as per Business Standard.
Services imports also declined 2.35% to USD 17.38 billion, resulting in a surplus of USD 18.12 billion.
The services data is, however, an estimate and will be revised based on the Reserve Bank of India’s release.
Meanwhile, India’s exports to China and the UAE are also rising at a steady rate. Exports to China, in particular, jumped 67.35% to USD 2.04 billion in December, driven by an increase in shipments of electronics and marine, according to commerce ministry data.
This article went live on January sixteenth, two thousand twenty six, at six minutes past two in the afternoon.The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
