India's trade deficit has widened to $25.04 billion in December 2025, following a five-month low of $6.6 billion in November. This shift reflects the difference between India's imports and exports during the specified period, serving as a key economic indicator.

In November 2025, the trade deficit had plummeted by over 61% due to strong growth in merchandise exports and a fall in merchandise imports. India's total exports grew 15.5% to $74 billion, while total imports slid 0.6% to $80.6 billion. Merchandise exports increased significantly from $31.94 billion in November 2024 to $38.13 billion in November 2025, marking the highest in over 10 years. Merchandise imports also moderated slightly, falling from $63.87 billion to $62.66 billion over the same period. Moreover, services exports grew about 12% to $38.5 billion, while services imports increased 8.1% to $18.6 billion.

However, looking at the bigger picture, after an intimidating merchandise trade deficit of $41.68 billion in October 2025, the deficit eased to $24.53 billion in November 2025. The average trade deficit in the last 12 months stood at $26.09 billion, with the November 2025 trade deficit lower at $24.53 billion.

Despite the recent fluctuation in trade deficits, India's trade with China has seen some interesting developments. Indian exports to China posted a $5.5 billion increase compared to last year, even as the trade deficit hit a record $116.12 billion. Bilateral trade also surged to an all-time high of $155.62 billion in 2025. Indian exports to China climbed to $19.75 billion between January and December 2025, posting a 9.7% increase. At the same time, Chinese exports to India increased 12.8% to $135.87 billion last year.

The rise in Indian exports signals a gradual diversification of India's export basket to China. Products such as oil meals, marine items, telecom equipment, and spices have begun gaining traction in the Chinese market.