India’s trade deficit has decreased to $21 billion in September, the lowest in five months. This drop is thanks to a small rise in exports, particularly in textiles, engineering, and electronic goods, which helped offset lower petroleum exports. Additionally, gold imports saw a significant decline.
In September, India’s exports reached $35 billion, slightly up from $34 billion last year. This increase is mainly due to higher demand for engineering goods from Russia and Europe, where military spending is growing. Exports of electronic items, including mobile phones to the US, also contributed to the overall rise.
Textile exports experienced a remarkable 17% increase in September. Many garment orders are shifting to India from Bangladesh, which has faced challenges due to conflicts. However, India’s textile exports had struggled over the past two years due to lower demand from Western markets.
The Federation of Indian Export Organisations (FIEO) highlighted that ongoing global trade disruptions and fluctuating crude and metal prices have impacted export values. Rising tensions in the Middle East have caused logistical issues for international trade, especially as a lot of trade with Europe and the Gulf passes through crucial shipping routes.
Commerce Secretary Sunil Barthwal stated that, despite challenges, India’s export performance in September remained strong. Engineering exports, making up about 25% of total exports, increased by 10%, while electronic exports rose by 9%. The government is working to boost shipping capacity to minimize the impact of regional conflicts on exports.
The World Trade Organisation (WTO) recently lowered its growth forecast for global merchandise trade in 2025, amid ongoing conflicts in West Asia that have disrupted shipping routes. The situation escalated recently with military operations involving Israel and Hezbollah.
A significant drop in gold imports, from $10 billion in August to $4 billion in September, also contributed to the improving trade balance. This decrease is likely due to traders placing advance orders in August for the festive season.
However, India’s petroleum exports fell by 26% in September, raising concerns for future exports. Low global fuel demand and falling prices could impact India’s petroleum sector.
Meanwhile, the engineering sector has shown promising growth, with exports increasing by 5.3% in the first half of the fiscal year. Key areas like industrial machinery and auto components are performing well, but challenges in the metal sector remain due to pricing and logistics.
The Commerce and Industry Ministry reported that India’s top export markets in September included the Netherlands, UAE, US, Brazil, and Japan, while the leading sources of imports were the UAE, China, Germany, Japan, and Taiwan.
