India’s merchandise exports first broke the monthly contraction sequence, which started from February, in August this year. It, however, saw a year-on-year contraction of 2.6% in September before expanding again by 6.21% in October, according to official data released on Wednesday.

Based on the internal assessment of exports in the first week of November, Barthwal said, there is a “substantial positive trend” despite a fall in commodities prices. “Green shoots are stabilising,” the commerce secretary added, referencing his own comment on October 13 that “green shoots” were visible.

India’s merchandise imports also rose in October to $65.03 billion mainly because of demand for gold and silver for personal use in the festive season, posting a 12.3% year-on-year growth, a commerce ministry official said. This led to a record $31.46 billion trade deficit in the month, according to the latest data. India’s gold imports in the month jumped by 95.4% to $7.23 billion and silver by 124% to $1.8 billion.

Dragged by five months of contractions in export growth between April to September (barring a positive growth in August), India’s cumulative merchandise exports in April-October fell year-on-year (y-o-y) by 7% to $244.89 billion, while imports fell 8.95% to $391.96 billion, leading to a trade deficit of $147.07 billion compared to a higher deficit of $167.14 billion in April-September 2022.

Barthwal said the global economic scenario is dim because of geopolitical upheavals and prevailing high interest rates in major economies, but that a focused approach has helped India.

The government is exploring new markets and insisting on reducing non-tariff barriers (NTBs) in some of the existing markets. “I’m hopeful that we will be crossing the last year’s figures,” he said, indicating a y-o-y positive growth in overall trade in FY24 despite a fall in commodity prices. “But we are waiting and watching,” he said pointing at global political and economic uncertainties.

Experts said while India’s domestic economy is robust, with the second highest Goods and Services Tax (GST) collections in October, external markets are uncertain.

Nilaya Varma, co-founder and CEO of consultancy firm Primus Partners, said: “But, efforts of the government to boost exports through schemes such as PLIs (production-linked incentive scheme) and through FTAs (free trade agreements) are showing results. While imports are also growing because of imports of key inputs such as energy, exports have also started moving up. If the geopolitical situation doesn’t worsen further, India may surpass last year’s export figures.”

India’s merchandise exports crossed $451 billion in 2022-23 while overall exports (goods and services together) in FY23 was a record $770 billion. In October, 22 out of 30 main sectors showed positive growth.

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