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Higher exports helped India's merchandise trade deficit come in lower than expected at $19.8 billion in December, data showed on Monday, though officials signalled that the turmoil in the Red Sea could have an impact on this month's figures.

Economists polled by Reuters had expected a merchandise trade deficit of $21 billion in December.

"There has been a demand upturn in December (leading to higher exports). This provides us a cushion as there are uncertainties for trade in January and going forward due to the Red Sea crisis," Trade Secretary Sunil Bharthwal said.

Nearly 80% of India's merchandise trade with Europe passes through the Red Sea where shipping has been attacked by Yemen's Iran-backed Houthi militants, in a spillover from Israel's more than three-month war with Hamas in Gaza.

Trade ministry official Satya Srinivas told reporters India's December exports were not impacted by the Red Sea crisis, but some more recently consignments had been put on hold.

India's merchandise exports in December stood at $38.45 billion, while imports were $58.25 billion, government data showed on Monday. In the previous month, merchandise exports were $33.9 billion, while imports stood at $54.48 billion.

Merchandise exports for the period April-December totalled $317.12 billion, while imports for the same period reached $505.15 billion, the data showed. The figures compared with $336.30 billion in exports, and $548.64 billion in imports for the same period last year.

In December, services exports were $27.88 billion, while imports were $13.25 billion. In November, services exports were $28.68 billion and imports were $13.4 billion.