INDIA DECEMBER 2024 TRADE – QUICK DATA POINTS
For December 2024, merchandise trade deficit eased to $21.94 Billion as gold imports eased. It may be recollected that in late December 2024, the DGFT had revised gold imports lower as there had been erroneous double counting at the SEZs. The net impact was that the cumulative trade deficit for FY25 has eased by $10.23 Billion, a significant reduction. Let us look at the top drivers of the export story for December 2024.
Key contributors to the export basket in Dec-24 were Engineering Goods $10.84 Billion (+8.4%), petroleum products at $4.92 Billion (-28.6%), Electronic Goods $3.58 Billion (+35.1%), Drugs & Pharmaceuticals $2.49 Billion (+0.6%), Organic & Inorganic Chemicals $2.45 Billion (+-2.9%), and Gems & Jewellery $2.13 Billion (-26.5%). The key import contributors were crude & petroleum products $15.27 Billion (+2.2%), Electronic Goods $8.34 Billion (+9.6%), Machinery $4.70 Billion (+11.8%), Gold $4.70 Billion (+55.4%), and Transport Equipment $2.79 Billion (-1.0%).
Let us talk about key export destinations and import sources. Top export destinations for December 2024 were United States $7.02 Billion, United Arab Emirates $3.05 Billion, the Netherlands $1.58 Billion, China $1.23 Billion, and the UK $1.23 Billion. What where the big sources of imports of goods for India. For December 2024, top import origin nations were China $9.75 Billion, Russia $4.93 Billion, United Arab Emirates $4.81 Billion, United States $3.77 Billion, Iraq $2.55 Billion, Saudi Arabia $2.30 Billion, and Germany $1.95 Billion.
HOW MERCHANDISE TRADE EVOLVED IN LAST 1 YEAR
Here is the monthly data of merchandise exports, imports, and trade deficit.
Monthly Data |
Exports ($ Billion) |
Imports ($ Billion) |
Total Trade |
Trade Surplus / Deficit |
Dec-23 | 38.45 | 58.25 | 96.70 | -19.80 |
Jan-24 | 36.92 | 54.41 | 91.33 | -17.49 |
Feb-24 | 41.40 | 60.11 | 101.51 | -18.71 |
Mar-24 | 41.68 | 57.28 | 98.96 | -15.60 |
Apr-24 | 34.99 | 54.09 | 89.08 | -19.10 |
May-24 | 38.13 | 61.91 | 100.04 | -23.78 |
Jun-24 | 35.20 | 56.18 | 91.38 | -20.98 |
Jul-24 | 33.98 | 57.48 | 91.46 | -23.50 |
Aug-24 | 34.71 | 64.36 | 99.07 | -29.65 |
Sep-24 | 34.58 | 55.36 | 89.94 | -20.78 |
Oct-24 | 39.20 | 66.34 | 105.54 | -27.14 |
Nov-24 | 32.03 | 63.86 | 95.89 | -31.83 |
Dec-24 | 38.01 | 59.95 | 97.96 | -21.94 |
Data Source: DGFT (Nov-24 figures are DGFT revised)
How do the trade figures compare with the averages of the last 12 months. Over the previous 12 months, the average merchandise exports stood at $36.77 Billion, while average merchandise imports stood at $59.14 Billion. The December exports and imports are sharply higher than the 1-year average. The average trade deficit in last 12 months stood at $22.36 Billion; with the December 2024 trade deficit at $21.94 Billion; being slightly lower.
TRADE GAP – WHAT BOOSTED EXPORTS AND WHAT REDUCED IMPORTS
Here is a look at the star export performers in December 2024, based on the yoy percentage increase in exports. Cereals (+67.9%), Rice (+64.0%), Jute (+51.6%), Cashew (+45.7%), Coffee (+36.9%), Electronic Goods (+35.1%), Tobacco (+24.0%), Mica/Coal/Ores (+23.4%), Meat/Dairy/Poultry (+17.9%), Marine Products (+15.8%), and Handicrafts (+14.9%) were the key export growth drivers in December 2024. Major items in the trade basket that showed lower imports yoy in December 2024 included Coal/Coke/Briquettes (-43.4%), Pearls (-42.0%), Iron & Steel (-18.6%), Project Goods (-12.4%), and Leather Products (-12.3%).
TRADE DATA BREAK-UP FOR DECEMBER 2024
Here is a break up of the merchandise and services export and import data and the individual deficit / surplus along with the overall picture.
Macro Variables (Trade Related) |
Dec-24 ($ Billion) |
Nov-24 ($ Billion) |
Dec-23 ($ Billion) |
Change YOY (%) |
Merchandise Exports | 38.01 | 32.03 | 38.39 | -0.99% |
Merchandise Imports | 59.95 | 63.86 | 57.15 | 4.90% |
Total Merchandise Trade | 97.96 | 95.89 | 95.54 | 2.53% |
Merchandise Trade Deficit | -21.94 | -31.83 | -18.76 | 16.95% |
Services Exports | 32.66 | 35.67 | 31.63 | 3.26% |
Services Imports | 17.50 | 17.68 | 15.63 | 11.96% |
Total Services Trade | 50.16 | 53.35 | 47.26 | 6.14% |
Services Trade Surplus | 15.16 | 17.99 | 16.00 | -5.25% |
Combined Exports | 70.67 | 67.70 | 70.02 | 0.93% |
Combined Imports | 77.45 | 81.54 | 72.78 | 6.42% |
Overall Trade Volume | 148.12 | 149.24 | 142.80 | 3.73% |
Overall Trade Deficit | -6.78 | -13.84 | -2.76 | 145.65% |
Data Source: DGFT and RBI
What is the broad picture that we gather here? The overall trade deficit (combining merchandise deficit and services surplus) has reduced sharply to $-6.78 Billion; nearly halving over the previous month. Remember, previous month figures are post revision for double counting. While the merchandise trade deficit is up yoy, the services trade surplus is lower than last year. That has led to spike in overall trade deficit.
CUMULATIVE TRADE DATA BREAK-UP FOR FY25 (APR-DEC)
Having seen the monthly picture of December 2024, here is a cumulative picture of the first 9 months of FY25.
Macro Variables (Year-to-Date) |
FY25 (Apr-Dec) |
FY25 (Apr-Nov) |
FY24 (Apr-Dec) |
Change YOY (%) |
Merchandise Exports | 321.71 | 284.31 | 316.65 | 1.60% |
Merchandise Imports | 532.48 | 486.73 | 506.39 | 5.15% |
Total Merchandise Trade | 854.19 | 771.04 | 823.04 | 3.78% |
Merchandise Trade Deficit | -210.77 | -202.42 | -189.74 | 11.08% |
Services Exports | 280.94 | 251.94 | 251.71 | 11.61% |
Services Imports | 149.67 | 132.47 | 131.64 | 13.70% |
Total Services Trade | 430.61 | 384.41 | 383.35 | 12.33% |
Services Trade Surplus | 131.27 | 119.47 | 120.07 | 9.33% |
Combined Exports | 602.65 | 536.25 | 568.36 | 6.03% |
Combined Imports | 682.15 | 619.20 | 638.03 | 6.92% |
Overall Trade Volume | 1,284.80 | 1,155.45 | 1,206.39 | 6.50% |
Overall Trade Deficit | -79.50 | -82.95 | -69.67 | 14.11% |
Data Source: DGFT and RBI (Trade data in Billion $)
The overall trade deficit (combining merchandise deficit and services surplus) at $-79.50 Billion; is about $10.23 Billion lower than what it would have been in the normal course. This is largely because gold and other commodities coming through the SEZ had been reportedly double counted, leading to a surge in the trade deficit last month to $37.8 Billion. That has been reduced to $31.83 Billion, still an all-time record. The net 3 months data will be crucial to the current account deficit for FY25.
CURRENT ACCOUNT DEFICIT OUTLOOK FOR FY25
For FY25, we have actual data for Q1FY25 and Q2FY25 with the CAD averaging around 1.2% of GDP. However, this is expected to spike in Q3 and Q4, although the spike may not be all that bad, especially after the downward revision of gold imports data. However, to keep the CAD in check for FY25, the government still needs to focus on curbing gold imports into India!
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