India’s merchandise exports recorded their strongest growth in 28 months during October, surging 17.3 percent year-on-year to reach USD 39.2 billion, primarily driven by pre-Christmas inventory stockpiling in Western markets.
The growth trajectory was notably supported by significant increases across various sectors, with engineering goods rising by 39.4 percent, electronic goods by 45.7 percent, and readymade garments by 35.1 percent.
Despite this positive export performance, the country’s trade deficit widened to USD 27.1 billion in October from September’s USD 20.8 billion, as imports reached a historic high of USD 66.34 billion, marking a 3.9 percent increase.
The surge in imports was led by various commodities, including crude oil which rose by 13.3 percent, electronic goods by 6.8 percent, and vegetable oil by 50.9 percent.
Commerce Secretary Sunil Barthwal expressed optimism about the export outlook, projecting that India’s combined goods and services exports could reach USD 800 billion in the current financial year.
He attributed the improved performance to enhanced manufacturing competitiveness, particularly citing the impact of the Production Linked Incentive (PLI) scheme.
A noteworthy development was the robust 27.7 percent growth in non-petroleum and non-gems and jewellery exports, which reached USD 31.36 billion, serving as a key indicator of domestic manufacturing strength.
However, petroleum product exports, constituting 12 percent of India’s export basket, experienced a 22.1 percent contraction to USD 4.6 billion, influenced by declining global crude oil prices.
The services sector demonstrated strong performance, with exports growing by 21.3 percent to USD 34 billion and imports rising by 26.3 percent to USD 17 billion, resulting in a services trade surplus of USD 17 billion.
However, the October services trade data remains preliminary and subject to revision based on future Reserve Bank of India updates.
Federation of Indian Export Organisations President Ashwani Kumar highlighted that while the double-digit export growth was encouraging amid global economic uncertainties, ongoing tensions between Israel and Iran have created logistical challenges, particularly affecting trade routes through the Red Sea to Europe, Africa, and the Gulf region.
