Exports decline 4.9%, while imports rise 27% on-year in November

India’s merchandise exports failed to sustain October’s gains, contracting 4.9% on-year in November from a remarkable 17.3% on-year growth (the fastest in 28 months) in the previous month. At $32.1 billion, export growth was pulled down by a slide in the exports of gems and jewellery (down 26.3% on-year) and oil (down 49.8%). However, core¹ exports grew 11.8%, though they were slower than the 27.7% reported in October.

Brent crude oil prices averaged $74.4 per barrel in November, compared with $75.7 in October, reflecting weakness in oil exports. Moreover, the benefits from discounted Russian oil imports seem to be waning.

Gems and jewellery drive import growth

For the first time this fiscal, merchandise imports grew in double digits on-year (27%) to $69.95 billion in November. A 234.3% surge in gems and jewellery imports may have boosted import growth. Gold imports rebounded from a 1.4% contraction in the previous month and rose 331.4% on-year. The increase was on the back of booming demand courtesy the festive and wedding seasons and higher gold prices (up 33.6% on-year in November to $2,651/troy oz vs $1,984/troy oz in November 2023). Silver imports grew 36% from -74.8% in October. Conversely, core import growth was almost stable at 6.1% vs 5.3% on-year growth in the previous month.

Accordingly, merchandise trade deficit widened to an all-time high of $37.8 billion in November from $21.3 billion in November 2023 and $27.1 billion in October 2024.

Cumulatively, merchandise exports rose 2.2% to $284.3 billion during April-November from $278.3 billion in the year-ago period. Cumulative imports grew faster, at 8.4%, to $486.9 billion from $449.2 billion. As a result, the trade deficit during the period widened to $202.5 billion from $171 billion.

Services exports grew 22.3% on-year in October² from 14.6% in September. Consequently, the services trade surplus rose to $17.1 billion in October compared with $14.6 billion in October 2023 and $16.1 billion in September 2024.

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