Goods trade gap narrows even as US tariffs bite

India's merchandise exports in August saw 6.7% increase to $35.1 billion as compared to $32.89 billion in the same month last year with a significant reduction in trade deficit despite facing a 25% additional tariff in its biggest market, the US, from August 7 because of exporters' grit and the government's policy response, senior officials said.

- Pricey Javacual

"Despite global uncertainties and trade policy uncertainties, India's exporters have done extremely well. It shows that policies of the Government of India have paid-off well," commerce secretary Sunil Barthwal said on Monday while releasing the monthly trade data.

He said the government's continued four-pillar reforms will help Indian exporters to withstand global headwinds such as geopolitical disruptions because of Russia-Ukraine and Israel-Hamas wars and the US tariff action, slapping a 25% tariff on Indian goods effective from August 7 and imposing another 25% secondary tariff from August 27. The four-pillars are domestic reforms such as Goods and Services Tax rationalization, product-wise and country-wise export diversion, import substitution and export promotion.