India’s Trade Outlook: September’s Export Growth and Challenges
In September, India’s merchandise exports showed signs of recovery, increasing by 0.5% year-on-year to USD 34.6 billion after two months of decline. This growth was driven by a 9.2% rise in core exports, with notable gains in sectors like pharmaceuticals, engineering goods, and garments. However, a 26.8% drop in petroleum exports offset these gains.
Despite the improvement, challenges such as container shortages and geopolitical uncertainties continue to affect trade. The US’s higher tariffs on Chinese imports may lead to increased Chinese exports to Asian markets, including India, widening the trade deficit.
On the import side, merchandise imports rose by 1.6% to USD 55.4 billion, with oil imports declining due to lower crude prices. This helped narrow India’s trade deficit to USD 20.8 billion in September, down from USD 29.7 billion in August.
Overall, India’s trade outlook remains uncertain, but strong services trade and remittance inflows are expected to provide stability.
Doubts Revealed
merchandise exports -: Merchandise exports are goods that a country sells to other countries. These can include things like clothes, electronics, and machinery.
core exports -: Core exports refer to the main products that a country regularly sells to other countries. For India, this includes items like pharmaceuticals and engineering goods.
pharmaceuticals -: Pharmaceuticals are medicines and drugs that are used to treat illnesses and keep people healthy.
engineering goods -: Engineering goods are products made using engineering skills, like machines, engines, and tools.
petroleum exports -: Petroleum exports are when a country sells oil and oil-based products to other countries. Oil is used for fuel and making many products.
container shortages -: Container shortages mean there aren’t enough big boxes used for shipping goods across the world. This can slow down trade because goods can’t be transported easily.
geopolitical uncertainties -: Geopolitical uncertainties are unpredictable events or tensions between countries that can affect trade and international relations.
tariffs -: Tariffs are taxes that a country puts on goods coming from other countries. This can make imported goods more expensive.
remittance inflows -: Remittance inflows are money sent back home by people working in other countries. This money helps support families and the economy in their home country.
current account -: The current account is a part of a country’s financial records that shows the difference between money coming in and going out from trade, services, and remittances.
