Increased festive demand in the West pushed up India’s goods exports in October 2024 by 17.23 per cent (year-on-year) to $39.2 billion, the highest this fiscal, despite geopolitical uncertainties and logistical challenges.
The trade deficit, however, widened to a two-month high of $27.14 billion as imports surged to $66.34 billion in October 2024, posting a 3.9 per cent increase over the same month last fiscal, as per quick estimates of trade data for October 2024 shared by the Commerce Department on Thursday.
“Christmas sales are looking better than last year’s and perhaps that is also reflecting in our increased exports. This also reflects that this year is going to be better than last year from now onwards,” Commerce Secretary Sunil Barthwal said at a press briefing.
The export numbers are encouraging, especially at a time when policy makers are struggling to rein in inflation and prop up sluggish industrial sector performance.
Growth factors
“One of the chief reasons underpinning the sequential rise in the trade deficit appears to be a jump in the volume of crude oil imports, as well as a festive season-led uptick in gold imports,” said Aditi Nayar, Chief Economist, ICRA.
While India’s total exports in April-October 2024 increased a modest 3.18 per cent (year-on-year) to $252.28 billion, it was largely weighed down by declines in key sectors such as petroleum products and diamond & jewellery, barring which exports increased 8.9 per cent indicating strength in other export categories, pointed out Ajay Srivastava, trade expert.
In October, export growth was spread across multiple sectors such as engineering goods, electronics, gems & jewellery, readymade garments, leather, jute and jute products, handicrafts, pharmaceuticals and chemicals, many of them labour-intensive.
Exporters are mostly upbeat about the export numbers and see it as a possible sign of revival. “Continuous hard work of exporters has started showing results, which may continue during the coming months,” said FIEO President Ashwani Kumar.
He added that growth had taken place despite rising tensions between Israel-Iran, which impacted Indian exports as most of the country’s exports to Europe, Africa, CIS and Gulf region was happening through the Red Sea route or the Gulf region.
“The supply chain is getting re-aligned due to the Bangladesh crisis and buyers are looking for China’s alternative...This is the appropriate time for the government to whole- heartedly support garments exporters through handholding, capacity augmentation, skilling, investment and sustained financial support,” said Mithileshwar Thakur, Secretary General, AEPC.
Imports during April-October 2024 increased 5.77 per cent to $ 416.93 billion widening the trade deficit to $164.65 billion from $149.67 billion in April-October 2023.