November’s Merchandise Exports up 19%, dragging Trade Deficit to 5-month Low

The month of November 2025 proved to be a comeback month for Indian merchandise exports. While in October 2025, the exports contracted, widening the India trade deficit, this November’s merchandise exports again narrowed down the trade deficit, by expanding 19.37% YoY, rising to $38.13 billion. It is not only that the exports surged, but the narrowing trade deficit is also a result of the decrease in imports, which reduced by 1.88% during November to $62.66 billion, dragging India’s total trade deficit to % 24.53% billion, which is the least recorded in the last five months. This is a massive improvement from the whopping $41.68 billion trade deficit recorded in October 2025. 

Factors Behind Narrowing Trade Deficit

Electronics exports played a pivotal role in the declining trade deficit, as they increased by 39%. The increase in the exports of electronics goods surged mainly due to global demand and production-linked incentives. Apart from electronics, engineering goods, and gems & jewellery exports also witnessed a significant rise, mostly in double-digits. 

Coming to the declining imports, gold imports fell drastically by 59% in November, which has been another crucial factor in reducing the trade gap. Apart from gold, coal imports were slow, as well as those of crude oil. 

Since April 2025, the total exports until November increased by 2.62% to $292.07 billion; however, imports surged at a great pace at 5.59% to $515.21 billion, stretching the trade gap to $223.14 billion. The November increase in exports came as a rescue to the ever-widening India’s trade deficit.   

How are Tariff Risks affecting the Numbers?

Even though there are new tariff impositions on many Indian goods, even up to 50% on certain goods, but still then the US remains the top-most destination for India to export its goods and services. Apart from the US, the other destinations for significant exports include the UAE, China, the Netherlands, and the UK. One shift that has been taking over the Indian merchandise exports space is that the exporters are now trying to diversify their exports more towards Asia and Europe-based clients. This is to shield their businesses from the tariff warfare. 

Trade Deficit Narrowed – But Rupee is Falling – How?

You must be thinking that if India’s trade deficit is narrowing down, then how come the Indian currency is still weakening? Rupee touched its all-time low at ₹91 for one US dollar, which is the worst in history. 

As per analysts, this is due to capital account pressures, which are again owing to lower foreign inflows in the investment space, then the RBI’s forward book unwinding, and the global scenario and market sentiment. The trade fundamentals are not much influencing the Rupee valuation. 

As per experts, this declining Rupee might continue for the near term, even when the current account deficit is expected to go below 1% in the coming quarter. 

Trade Outlook  

Finally, coming to the outlook for the upcoming quarter, Analysts and experts suggest that the exports will hold on for the fourth quarter of FY26, again driven mainly by electronics, gems and jewellery exports, and engineering products. 

On the imports side, experts suggest that if gold and oil prices remain stable, then the imports might remain stable within and the overall Trade deficit to remain within $25 billion and $28 billion. 

However, the tariff uncertainty is still looming, along with uncertainty in the market dynamics and commodity prices. So, it will be interesting to see how the trade turns out this month and the following months to come. 

Read About : Top Indian Conglomerates Performance 

Source: https://www.cnbctv18.com

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