India’s exports jump 17.2% in October, strong momentum in US

India’s total exports during April-October 2024 reached US$ 468.3 billion, a 7.3% increase YoY. Merchandise exports in October alone jumped by 17.2% to US$ 39.2 billion led by rice, electronic goods, engineering goods, jute products and readymade garments among others.

The US remained India’s largest export destination, while China was the top source of imports, with a 9.8% increase to US$ 65.9 billion. India’s export cycle typically improves in the second half of the year, but much depends on the pace of global growth recovery, which remains patchy.

During the April-October 2024 period, India’s total exports are estimated at US$ 468.3 billion, reflecting a 7.28% growth YoY. Merchandise exports for October 2024 amounted to US$ 39.2 billion, a 17.2% jump from US$ 33.4 billion in October 2023. Cumulatively, merchandise exports for April-October 2024 were valued at US$ 252.3 billion, up by 3.2% YoY.

 

China was India’s highest source of imports, with imported goods worth US$ 65.9 billion, marking a 9.8% increase YoY, according to data from the Ministry of Commerce & Industry. However, India’s exports to China fell by 9.4%, reaching US$ 8 billion.

The US was India’s top export destination during this period, with outbound shipments rising by 6.3% to US$ 47.2 billion.

India’s top 10 import sources during this period were China, Russia, the UAE, the US, Iraq, Saudi Arabia, Indonesia, Korea, Switzerland, and Singapore. Imports from Russia grew by 8.8% YoY to US$ 38.8 billion, while imports from the UAE surged by 55.1% YoY to reach US$ 38.6 billion.

The US led as India’s largest export market, followed by the UAE, the Netherlands, the UK, China, Singapore, Saudi Arabia, Bangladesh, Germany, and Australia. Exports to the UAE rose by 15.9%, during April-October 2023 to reach US$ 20.9 billion.

In October, imports from the UAE, with which India has a free trade agreement, surged by 70.3% to US$ 7.18 billion, while exports to the UAE grew by 43.3%, reaching US$ 3.72 billion.

US market robust amid geopolitical strain

The US, which is India’s largest export destination has remained largely unaffected by global geopolitical issues and price fluctuations in commodities such as fuel. Strong diplomatic and trade ties between India and the US have helped sustain trade. Moreover, sectors like pharmaceuticals and machinery, which rank among India’s top exports to the US are less sensitive to global price fluctuations. 

During the period from April to August (latest data available), India’s export performance to the US presented a mixed picture across various sectors when compared to the same period last year. While some categories saw significant growth, others experienced declines, the overall result was a 5.5% increase in exports. Electric machinery products saw a solid 19.6% increase, driven largely by a remarkable 51% rise in smartphone exports, a standout performer.

Pharmaceutical products also experienced strong growth, rising by 22%, while textile products and apparel grew by 7% and 18.8%, respectively. The carpet sector performed well, with a 13.7% increase, and footwear exports grew by 17%.

One of the most notable developments was the five-fold increase in exports under ships, boats, and floating structures, signaling a significant uptick in demand. Other product categories, such as essential oils, paper and paperboard products, coffee, tea, mate, and spices, cereals, lac and gums, and inorganic chemicals, all saw growth in the 20-30% range.

However, the gems and jewellery sector overall saw a contraction, with diamond exports experiencing an 18% dropalone. Additionally, mineral oils and fuels also recorded a decrease.

Other Markets

During the same period, India’s export performance to its top five markets showed positive trends across most regions. The UAE, Netherlands, and UK recorded growth in exports, while China saw a contraction of 8.3% during the same period.

• The UAE showed a notable 9% growth, with key drivers including mineral oils/fuels (11.9% growth), ships, boats and floating structures (46.85% growth), and strong demand for machinery, aircraft, vehicles, and iron & steel.
• The Netherlands emerged as a major highlight, with exports reaching US$ 10 billion, marking an impressive 35% growth. This surge was largely driven by a 54% increase in mineral oils/fuels, as well as strong performances in electrical machinery (up 55%) and apparel, which shows promising future prospects.
• The UK also showed solid growth, up 14.9%, with exports amounting to US$ 6.2 billion. The key drivers included a substantial 76% growth in mineral oils/fuels, 12% growth in electrical machinery, and notable increases in gems and jewellery (56%) and pharmaceutical products (19%)

Sector-wise trends

Overall, engineering goods remained India’s largest export category, valued at US$ 56.2 billion. Petroleum products followed with US$ 36.6 billion, while exports of electronic goods reached US$ 15.6 billion. Exports of drugs and pharmaceuticals totaled US$ 14.4 billion, and organic and inorganic chemicals stood at US$ 14.1 billion.

Commerce Secretary Sunil Barthwal highlighted the steady growth in exports and the success of niche products like Ayurvedic goods and apples in international markets.

India’s merchandise export growth of 5.3% outpaced the global average of just 0.1%. Gold imports also saw a significant increase, rising from US$ 4.9 billion last year to US$ 10 billion this year, driven by seasonal demand tied to Indian festivals, according to Barthwal.

Non-Petroleum exports were recorded at US$ 34.6 billion, increasing by 25.6% YoY. Cumulative non-petroleum exports in April -October 2024 were valued at US$ 211.3 billion, increasing by 7.34% YoY. This was also higher than the previous record of US$ 206.2 billion in April-October 2022. Non-petroleum & non-gems & jewellery exports increased by 27.7% to US$ 31.4 billion in October.

Rice exports notably witnessed a strong surge by 85.8% YoY in October, ostensibly led by the removal of the ban by the government on non-basmati rice exports in the previous month. Other top performers included electronic goods (up 45.7% YoY), engineering goods (up 39.4% YoY), jute mfctrg incl floor coverings (up 37% YoY), RMG of all textiles (up 35.1% YoY), tobacco (up 34.3%), handicrafts (up 32.7%) and coffee (up 32.4%).

Top Performing Products in October

Source: Press Information Bureau (October, YoY)

Projections and Expectations

In April 2024, the World Trade Organization (WTO) projected a rebound in global merchandise trade, forecasting growth of 2.6% in 2024 and 3.3% in 2025, following a weak 2023 marked by inflation and high energy prices. Despite this positive outlook, geopolitical uncertainties remain a risk.

India’s export cycle typically improves in the second half of the year, but much depends on the pace of global growth recovery, which remains patchy. With newly elected POTUS Donald Trump proposing a new era of tariffs, exporters will need to keep a keen watch on US market and regulatory trends. While China’s policy support is expected to help, the region’s growth recovery is likely to be gradual. Overall the macroeconomic environment favors softer liquidity conditions, which should support India’s export growth.

Imports are expected to rise due to higher industrial input and metal prices, though the sustainability of this trend is uncertain amid weaker demand in the Eurozone and China.

A Bank of Baroda reports estimates India’s current account deficit (CAD) to remain stable at 1-1.2% of GDP in FY25 while the Merchandise exports are projected to reach US$107.5 billion in Q3 FY25, with strong growth in non-oil exports driven by robust domestic activity and improving demand from key partners, as reported by the EXIM bank of India. However, global economic uncertainties and geopolitical risks could still pose challenges to this outlook.