Exports rose 0.5%, while imports grew 1.6% on year in September

Merchandise exports rebounded in September after shrinking for two months, including a 9.3% contraction in August. At $34.6 billion, they were up 0.5% on-year as core¹ exports rose 9.2%, compared with a 2.4% rise in August.

Sequentially, gems & jewellery exports also displayed some improvement in September after remaining weak in previous few months.

Brent crude oil prices averaged $74.3 per barrel in September 2024, compared with $94 in the same month of 2023. Any fall in crude oil prices reduces India’s oil import bill but affects the value of its exports.

In September, exports of petroleum products — a major exports item — fell 26.8%, dragging down the overall performance.

On the other hand, exports of drugs and pharmaceuticals, engineering goods, organic and inorganic chemicals and readymade garments were supportive.

Growth in merchandise imports softened, however. At $55.4 billion in September, imports rose 1.6% on year as oil imports remained in the contractionary zone in September on easing crude oil prices. Oil imports fell 10.5% in September, following a 32.4% fall in the previous month. Merchandise exports had recorded an average 5.6% growth in the previous three months.

Gems and jewellery imports, though robust, stabilised in September after the surge in August. Core imports, too, maintained their momentum.

With exports growing marginally and merchandise imports slowing, India’s trade deficit narrowed to $20.8 billion in September from $29.7 billion in August and was stable compared with $20.1 billion in September 2023.

Cumulatively, merchandise exports rose 1% to $213.22 billion during April-September from $211.08 billion in the year-ago period. Cumulative imports grew faster at 6.2% to $350.7 billion from $330.3 billion. As a result, trade deficit during the period widened to $137.4 billion from $119.2 billion in the previous year.

Services exports saw a modest 5.7% growth in August², compared with 16.6% in July. Services imports grew faster than exports, clocking 8.8% on-year in August, versus 15.7% in July. Net-net services trade surplus stood at $13.9 billion in August, compared with $13.6 billion in August 2023 but marginally lower from $14.7 billion in July 2024.

¹ Non-oil and non-gold
² The latest data released by the RBI for the services sector is for August 2024