India's goods trade gap widens to $27.14 billion in October as imports outpace exports

India's commerce ministry outlined the trade figures for October on November 14

Merchandise exports jumped 17.23 percent on-year to $39.2 billion in October, the quickest in 28 months thanks to stronger demand for Indian goods across key markets ahead of Christmas. Imports were higher by 3.9 percent during the same period.

Despite this, sequentially, the goods trade deficit widened to $27.14 billion in October from $20.8 billion in the previous month due to a faster pace of growth in imports, data released on November 14 showed.

While goods exports were up 13.4 percent during the month, imports grew at a faster clip at nearly 20 percent, sequentially.

"Despite the volatile global atmosphere, Indian exporters have been able to overcome that situation and deliver," Commerce Secretary Sunil Barthwal said, adding that if the current trend remains, the government is likely to exceed the target of $800 billion in overall exports (goods and services) this fiscal.

On a year-on-year basis, India's goods trade gap in October was narrower by $3.29 billion as compared to the same month last year.

The major drivers of merchandise export growth in October 2024 included engineering goods (39.7 percent on-year), electronic goods (45.69 percent), organic and inorganic chemicals (27.35 percent).

Among imports, inbound shipments of vegetable oil saw a jump of around 36 percent in October versus September. Gold imports too rose to $7.13 billion, up from $4.39 billion a month ago, while crude oil imports increased to $18.2 billion from $12.5 billion.

According to the commerce ministry's estimates, services exports are expected to grow by 21.3 percent in October on-year, whereas imports in this segment are seen falling almost equally at 20.8 percent.

As a result, India's total trade balance is seen at $10.12 billion in October versus $15.85 billion in the same month last fiscal.

For the April-October period, merchandise exports were higher at $252.28 billion as compared to $244.51 billion in the first seven months of 2023 and goods imports too were larger by$22.75 billion.

The merchandise trade deficit during April-October 2024 was $164.65 Billion wider than the 149.67 billion during April-October 2023.