Mint Quick Edit | India should shun trade policy inflexibility
Subscribe to enjoy similar stories. India imports goods worth more than it exports, but the gap has narrowed, according to official data.
The country logged a trade deficit of under $22 billion in December, down from $32.8 billion the previous month, as outward shipments of merchandise rose while inward fell. The November numbers that were first released by the Centre had shown eyebrow-raising imports, but then India’s gold intake was found to have been overstated by an error of accounting, so that month’s deficit was revised downwards by about $5 billion.
Last month’s numbers provide added relief on the external front. How we fare in 2025 onwards, though, is subject to the uncertainty of Donald Trump’s trade agenda once he takes office as US president next week.
In a best-case scenario, India will escape the ravages of a global trade war that his policies might spark off. But even if India isn’t a direct target of American measures, knock-on effects could hurt.
The mutual dynamics of the US, EU and China will need to be watched. In times of flux, India should shun policy inflexibility and widen its range of options to include joining large trade blocs and re-adjusting the rupee’s managed float if need be.
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