Exports grew 17.3%, while imports grew 3.9% on year in October

India’s merchandise exports staged a strong comeback, growing 17.3% on-year in October, the fastest in 28 months. The increase was a mild 0.5% the previous month even as there was average 5.8% on-year contraction during July-August. At $39.2 billion, exports surged as core¹ and gems & jewellery exports rose 27.7% and 8.7% on-year, respectively, even as oil exports contracted. Within the core group, export growth was particularly strong in categories such as engineering goods, electronic goods, chemicals, textiles, marine products and rice.

Brent crude oil prices averaged $75.7 per barrel in October, compared with $91.1 in the same month of 2023, reflecting weakness in oil exports, which contracted 21.9% on-year during the month. Apparently, taking advantage of the subdued oil prices, India jacked up its oil imports, which rose 13.4% on-year in the month.

Meanwhile, merchandise imports grew slower than exports at $66.34 billion or 3.9% on-year in October. While oil imports surged, gems and jewellery imports contracted, and core import growth was stable.

With the faster exports growth, the merchandise trade deficit narrowed to $27.1 billion in October from $30.43 billion in October 2023.

Cumulatively, merchandise exports rose 3.2% to $252.3 billion during April-October from $244.5 billion in the year-ago period. Cumulative imports grew faster, at 5.8%, to $416.9 billion from $394.2 billion. As a result, the trade deficit during the period widened to $164.7 billion from $149.7 billion.

Services exports grew 14.6% on-year in September², up from 5.7% in August. Services imports grew at 13.2% on-year versus 8.8%. Hence, the services trade surplus rose to $16.1 billion in September compared with $13.8 billion in September 2023 and $13.9 billion in August 2024. This is the highest surplus post January 2024, when it was $16.2 billion.

¹ Non-oil and non-gold
² The latest data released by the RBI for the services sector is for September 2024