India's Exports Fall 11.8% in October

India's exports decreased by 11.8% to $34.38 billion in October, signaling a sharp decline in outbound shipments and a record monthly trade deficit of $41.68 billion.

Export Decline Details

Weaker shipments to the US were the main cause of India's steep reduction in merchandise exports, which plummeted nearly 9% year over year to $6.3 billion from $6.9 billion during the same period last year. Steep tariffs on key export goods, such as textiles, seafood, jewellery, and diamonds, exacerbated this slump. The significant decline in exports across some industries was a result of increased trade barriers and unpredictability in global demand.

Surge in Imports and Trade Deficit

Imports grew 16.63% year over year to $76.06 billion, primarily due to higher shipments of gold and silver, while exports decreased. In October, gold imports alone reached $14.72 billion, a substantial increase over the $4.92 billion recorded in the same month the previous year. The trade gap increased from $32.15 billion in September and $35.62 billion in August to an unprecedented $41.68 billion due to the surge in precious metal imports.

Fiscal Year-to-Date Performance

India's total exports increased by 0.63% to $254.25 billion between April and October of the current fiscal year, while imports jumped by 6.37% to $451.08 billion. Policymakers keeping an eye on India's external balance are concerned about the ongoing disparity between exports and imports, which is made worse by increased imports of gold and silver and muted demand in key markets.

Policy and Outlook

The United States' tariffs, which have been in place since August, have hindered the expansion of India's main export industries, and these problems have not yet been resolved through current trade talks. The government is keeping a close eye on these changes and may take corrective action to help exporters and keep the growing deficit under control.

The difficulties India faces in preserving trade equilibrium in the face of changing global dynamics and trade policies are highlighted by this notable decline in exports and increase in imports.