Christmas orders push Oct goods exports to 7-month high, imports too surge sharply

“The Christmas sales are better this year than last year, led by electronic and engineering exports that have hit a record high,” Commerce Secretary Sunil Barthwal said. Regarding the US elections, Barthwal stated that India’s trade integration with the US is increasing irrespective of the regime in the US and is expected to continue.

“The merchandise trade data for October 2024 displayed divergent trends, with a sharp rise in the trade deficit in sequential terms, amidst a sizable moderation relative to October 2023. 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,” Aditi Nayar, Chief Economist and Head – Research & Outreach, ICRA Ltd, said.

Nayar said that non-oil merchandise exports registered a jump in both sequential and year-on-year growth, which is an encouraging sign, led by sectors such as electronic goods, engineering goods, chemicals, and garments. Electronic goods exports led the export gains with a 45.69 per cent jump in October to $3.4 billion compared to $2.35 billion in October 2023, while engineering goods exports surged by 39.37 per cent to $11.25 billion last month compared to $8.07 billion.

Federation of Indian Export Organisations (FIEO) chief Ashwani Kumar said that the double-digit growth in merchandise exports amidst continuing global economic uncertainties is a very encouraging sign of revival. Kumar added that ongoing international trade disruptions, along with volatility in crude and metal prices, have also contributed to the increase in export values.

“The rising tensions between Israel and Iran have continually led to logistical challenges, impacting international trade as much of our trade to Europe, Africa, the CIS, and the Gulf region passes through the Red Sea or Gulf route, prompting buyers to maintain larger inventories. Challenges related to trade finance remain key for MSMEs, as they impact the competitiveness of Indian products in global markets,” Kumar said.

India’s apparel exports, which had been slowing down for most of the year, also signalled a strong revival with a 35 per cent increase in October 2024 compared to last year.

“India’s ready-made garment (RMG) exports have achieved record growth despite global headwinds and disruptions due to ongoing wars, reflecting the resilience of the industry in withstanding tough times. We are now reaping the benefits of the RMG industry’s focus on quality and sustainability,” Sudhir Sekhri, Chairman of the Apparel Export Promotion Council (AEPC), said.

Mithileshwar Thakur, Secretary General of AEPC, said: “This is a time when the supply chain is realigning due to the Bangladesh crisis and global buyers seeking alternatives to China. Additionally, ongoing wars have disrupted traditional trade routes, adding to cost pressures.”

Engineering Export Promotion Council of India (EEPC) Chairman Arun Kumar Garodia stated that engineering goods exports have maintained momentum despite uncertainties and challenges. Engineering shipments recorded impressive growth in October on the back of increased demand from key markets across various sectors. This marks the sixth consecutive month of positive growth for engineering goods exports in the fiscal year 2024-25, he said.

“North America and the European Union remain the top destinations for engineering exports. Under the Trump administration, we hope that our bilateral trade with the US will receive a further boost, benefiting engineering exporters as a result. Engineering goods exports to the US, India’s largest market for these goods, have been positive so far this fiscal year. Strengthening the China Plus One strategy offers many opportunities for us,” Garodia added.