India Defies Global Headwinds with $38.5Bn Dec Shipments; Trade Deficit at $25Bn

India’s merchandise trade deficit marginally widened to $25.04 billion in December 2025, according to official data released by the Ministry of Commerce and Industry on Thursday. The figures reflect a resilient export sector that continues to find growth despite a challenging global trade environment and shifting tariff regimes.

The Dec Data Breakdown

India's merchandise exports for the month stood at $38.51 billion, a growth of 1.86% compared to $37.80 billion in December 2024. In contrast, imports surged by 8.7% to reach $63.55 billion, primarily driven by domestic demand for energy and high-value electronics.

The cumulative trade performance for the April-December period remains on a positive trajectory, with merchandise exports growing 2.44% to reach $330.29 billion.

Sectoral Highlights

The growth in outbound shipments was spearheaded by the "sunrise" sectors, which have been bolstered by the government's Production Linked Incentive (PLI) schemes:

• Electronics Goods: Grew by over 16%, remaining a major pillar of the export basket.
• Engineering Goods: Maintained a positive trajectory despite global supply chain hurdles.
• Pharma & Marine: Both sectors saw robust growth, aided by India’s strategy to diversify into new markets like Russia and the UAE.
• Agri-Boost: Meat, Dairy, and Poultry products registered a staggering 30% surge.

The US and China Factor

Commerce Secretary Rajesh Agrawal noted that Indian exports to the United States, a key market, remain strong, growing 9.75% in the first nine months of the fiscal year to reach $65.88 billion. Interestingly, while US trade deals remain a topic of negotiation, exports to China also saw a significant jump of 36.68% year-on-year, though the annual trade deficit with Beijing remains a structural challenge at $116 billion.

With total exports (Goods and Services combined) projected to cross $850 billion by the end of FY26, the government is focusing on fast-tracking Free Trade Agreements (FTAs) with the EU and UK to provide a "trade shield" for Indian exporters against rising global protectionism.

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