Merchandise exports surge amid focus on key markets, countries
India's merchandise exports grew 17.25% to $39.20 billion in October, with non-petroleum exports reaching a record $211.34 billion this fiscal year.
India’s merchandise exports registered 17.25% growth to $39.20 billion in October over the same month last year, with non-petroleum exports aggregating a record $211.34 billion in the first seven months of current financial year despite global headwinds, commerce secretary Sunil Barthwal said, crediting a concerted policy push and Christmas demand for the growth.
On the back of strong services exports, the government is expecting to close 2024-25 with record $800 billion in overall exports (both goods and services) if the trend continues. Cumulative overall exports in the first seven months (April-October) of FY25 is estimated at $468.27 billion, 7.23% up from $436.48 billion in April-October 2023. India registered a record $776.68 billion exports in FY24.
India’s services exports in October 2024 is estimated at $34.02 billion, 21.3% up from $28.05 billion in October 2023, according to trade data released on Thursday. Services data are extrapolation of previous month’s numbers as data for the services sector are released by the Reserve Bank of India (RBI) with a lag. “The estimations are often conservative, for example, last month $30.61 billion services export was projected for September 2024 and the actual number for the month that came now was $32.58 billion,” a commerce ministry official said requesting anonymity. Cumulatively, services exports in April-October 2024 posted a 12.5% jump to $215.98 billion.
“If we continue in this manner then definitely we are going to cross more than $800 billion of our exports in this (fiscal) year, and we will break the record,” Barthwal said highlighting the growth of non-petroleum exports. India imports more than 87% crude oil it processes; hence it has no control over its international pricing. But, robust growth of non-petroleum in such uncertain global situation reflects positive outcome of policy focus on specific sectors and key markets, including manufacturing push through production-linked incentive (PLI) scheme, the commerce secretary said. “I think, our strategy of focusing on certain sectors, our strategy of focusing on certain countries is perhaps now yielding results.”
The focus sectors are doing “extremely well”, he said, with engineering goods exports rising by over 39%, electronic goods exports by more than 35%, and organic and inorganic chemical exports by more than 27%. Similarly, labour intensive sectors such as readymade garments have performed well with around 35% growth. The government is expecting a jump in exports of agricultural items, especially after lifting of restrictions on rice shipments. The government has been focusing on six sectors –– engineering, electronics, pharmaceuticals, chemicals, plastics and agriculture –– as well as 20 countries to boost exports in a highly uncertain geopolitical environment.
Pointing to data since 2001, Barthwal said India’s trade with the United States has been “steady” irrespective of political changes and will only rise in coming years because the two partners complement each other. In 2001, the US’ imports from India was $9.7 billion, representing just 0.9% of its total global imports, according to data. By 2023, this figure jumped to $87.3 billion, making up 2.8% of the US’ imports from the world. “This trend underscores India’s increasing importance in the US supply chain and the strengthening economic ties between the two nations,” the unnamed official cited above said.
The latest data released on Thursday also showed a 3.9% increase in India’s merchandise imports to $66.34 billion in October 2024 as compared to $63.86 billion in October 2024. Robust exports narrowed India’s merchandise trade deficit in October to $27.14 billion lower than last October’s $30.42 billion .
Federation of Indian Export Organisations (FIEO) president Ashwani Kumar said that double-digit growth in merchandise exports amid continuing global economic uncertainties was an “encouraging sign of revival”. He, however, sought more focus on key issues such as high trade deficit and liquidity crunch faced by Indian exporters. “Conclusion of some of the key FTAs [free trade agreements] including UK, Peru, Oman and Sri Lanka should also soon see the light of the day,” he added.