​Temporary relief, Pg8

Key Highlights:

• India's merchandise exports grew by 19.4% to $38.1 billion in November 2025, the highest in any November in the last 10 years.
• Exports to the U.S. increased by 22.6% to $6.98 billion in November 2025 compared to November 2024.
• India's merchandise imports decreased by 1.9% to $62.7 billion in November 2025, leading to a reduced trade deficit.
• The 50% tariffs imposed by the U.S. are significantly impacting Indian exporters, particularly MSMEs in labor-intensive sectors.

Detailed Insights:

• Indian exporters are currently absorbing the impact of higher tariffs, but this strategy is unsustainable in the long term due to significant tariff differentials with competing countries.
• The depreciating rupee is partially offsetting the tariff impact, but it is insufficient to fully compensate for the financial strain on exporters.
• Falling merchandise imports suggest a potential weakening of domestic demand, which requires careful monitoring by the government, especially after recent GST rate reductions.
• The government's Export Promotion Mission aims to alleviate financial stress on exporters, but the detailed schemes need to be notified and implemented quickly.
• A credit guarantee scheme for exporters is suggested as a more effective measure than a moratorium on loan repayments, drawing from successful COVID-era relief measures.

Key Concepts Involved:

• Merchandise Trade: The buying and selling of goods between countries.
• Trade Deficit: The amount by which the cost of a country's imports exceeds the value of its exports.
• Tariff: A tax or duty imposed on goods when they are moved across a national border.