Q2 merchandise exports growth to slow down to 4.2% at $111.7 bn: Exim Bank

India’s total merchandise exports growth could slow down to 4.2% y-o-y growth at $111.7 billion during Q2 FY25(July-September) compared to 5.8% in the June quarter of the fiscal year, the latest data by specialised financial institution India Exim Bank shows. Non-oil exports are forecast to touch $89.8 billion in Q2 FY25, with a y-o-y growth of 6.26%, the Exim Bank data shows.

The growth in India’s exports can be attributed to “continued strong economic activity backed by sustained momentum in manufacturing and services sector, expected global monetary easing and improving demand prospects in trading partners”, the data by the Export-Import Bank of India shows.

The outlook is, however, subject to risks of “uncertain prospects” for advanced economies, geopolitical shocks, the Middle-East crisis, global supply chain disruptions and deepening geo-economic fragmentation. “The positive growth rate in total merchandise exports and non-oil exports, as witnessed in the previous three quarters, are likely to continue,” says the Exim Bank.

Forecasts of growth in India’s total merchandise exports and non-oil exports are released by Exim Bank quarterly, during the first fortnight of May, August, November, and February for the corresponding quarters, based on its Export Leading Index (ELI) model.

India’s trade deficit widened to $20.98 billion in June 2024 compared to $19.19 billion in the year-ago month, while monthly basis, the trade deficit narrowed from $23.8 billion in May 2024.

India’s total exports comprising merchandise and services combined were at $65.47 billion in June 2024, a 5.40% growth compared to June 2023. Total imports including both were at $73.47 billion, up 6.29% m-o-m.

For April-June 2024, India’s exports came in at $200.33 billion, registering a positive growth of 8.60%, while imports surged 8.47% to $222.89 billion.

The commerce ministry says the merchandise exports during June 2024 were $35.20 billion compared to $34.32 billion in June 2023, while merchandise imports were at $56.18 billion against $53.51 billion in June 2023.

Meanwhile, India’s merchandise trade with European countries was the highest in a decade in 2023-24, the commerce ministry's latest data shows. The trade performance was the second highest in 10 years in the case of North American nations, it revealed. Together, these two regions account for close to 25% of India’s overall foreign trade in goods.

According to ministry analysis, India’s exports to Europe stood at $98.9 billion during 2023-24, a tad higher than $98.3 billion registered during the previous year and almost double that of $50.4 billion registered in 2015-16, the lowest value of exports during 2014-24. Imports at $93.7 billion were also the highest during 2023-24, higher than $91 billion registered in 2022-23 and $61.5 billion (the lowest in a decade) registered during 2016-17.