India's Exports Hit 5-Month High, Shipments to US Increase, Trade Deficit Shrinks

India's export sector showed surprising resilience in November, growing by 19.4% despite ongoing tariff pressures from the United States. Increased shipments to both China and the US significantly contributed to this surge. A decline in gold and crude oil imports helped shrink the trade deficit to its lowest level in five months.

The trade deficit fell to $24.6 billion, the lowest since June, as imports decreased by 2% to $62.7 billion. The rise in exports was primarily fueled by engineering and electronics goods.

Commerce Secretary Rajesh Agrawal noted the positive impact on India-US trade, stating that both exports and imports are growing despite the tariffs. Imports from the US grew 38% to $5.3 billion.

**Key Factors in India's Export Performance:**

• November's merchandise export value was the highest since May, marking the most substantial monthly growth in three and a half years.
• Gold imports saw a significant decrease of 59.15% to $4 billion, while crude oil imports fell by 11.27% to $14.11 billion.
• The reduction in imports contributed to the narrower trade deficit, with the previous low recorded in June.

**Trade Deficit Improvement**

For the April-November period, exports saw an increase of 2.62% reaching $292.07 billion. Imports also grew by 5.59% to $515.21 billion. The total deficit for this period amounted to $223.14 billion.

Exports to the US reached an estimated $7 billion in November, a 22.6% increase despite the 50% tariffs. Shipments to China jumped by 90% to $2.2 billion. While the Netherlands held a slight lead during the April-November timeframe, China became India's third-largest export destination in November, surpassing the Netherlands.

According to think tank GTRI, the reversal of a previous slide in exports during October and November, despite the tariffs, can likely be attributed to higher exports of less-affected items like smartphones, pharmaceuticals, and petroleum products. ICRA's chief economist, Aditi Nayar, believes that normalized supply chains following holiday periods and reduced consumer demand after festivals contributed to the export growth and import reduction.

Commerce and Industry Minister Piyush Goyal stated that November's export growth more than compensated for a 12% decline in October, which was linked to the US tariffs. Market analysts have observed that exporters are actively diversifying their market strategies. The Commerce Secretary highlighted the contributions of sectors such as electronics, engineering, chemicals, and gems and jewellery to the rise in merchandise exports.

The ministry is finalizing guidelines for a Rs 25,060-crore export promotion mission. While acknowledging that this assistance may not fully counteract the US's 50% tariff, it will provide crucial liquidity support to exporters. FIEO President S C Ralhan noted that the US remained India's primary export market between April and November 2025, despite the tariffs, demonstrating the export community's resilience. Other significant export destinations during this period included the UAE, the Netherlands, China, the UK, Germany, Singapore, Bangladesh, Saudi Arabia, and Hong Kong. Ralhan emphasized that diversification of export markets and the resilience of key sectors have been crucial in supporting export growth.