India’s Q3 Merchandise Exports Expected to Reach $107.5 Billion Amid Modest Recovery
Modest Growth in Export Sector Despite Global Pressures
India Exim Bank projects a 1.85% year-on-year increase in merchandise exports to $107.5 billion for Q3 FY25 (October-December), a rise from $104.61 billion in the same period last year. While the modest rebound underscores steady demand from key trade partners, potential global monetary easing could further support India’s export environment amid ongoing global economic uncertainty.
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Key External Risks Persist in Global Trade Environment
Exim Bank highlights several risks, including geopolitical tensions in the Middle East, economic fragmentation, protectionist trade policies, and continued supply chain issues. These external factors may pose headwinds to the projected export growth, creating a cautious outlook for Indian exporters in the near term.
Positive Growth for Non-Oil, Non-Gemstone Exports
India Exim Bank forecasts a 7.39% increase in non-oil exports, expected to reach $91.7 billion. Non-oil, non-gems, and jewellery exports are anticipated to grow 7.8% to $82.7 billion year-on-year. These segments provide a stable base, supporting India’s trade amid fluctuating demand in commodity-based exports.
Trade Deficit Declines, But Momentum Remains Fragile
India’s trade deficit narrowed to $20.78 billion in September, its lowest level in five months, buoyed by modest export growth and a decline in imports. This deficit has fluctuated between $19.1 billion and $29.65 billion over the past six months, signaling a fragile balance that may be influenced by shifting demand and global supply chain stability.
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Modest Growth Across Quarters Reflects Stable Yet Limited Expansion
India’s exports reached $109.11 billion in Q1 FY25 and $102.34 billion in Q2, marking slight changes from the prior fiscal year. Exim Bank’s quarterly forecasts, using the Export Leading Index model, anticipate moderate momentum into Q4, with the next projection update expected in early February.
Conclusion
India’s gradual export recovery underscores the resilience of certain sectors amid global complexities. Yet, ensuring consistent growth will require adaptive strategies to counter both external shocks and internal economic challenges. As India moves into the final quarter of FY25, export stability will depend on proactive trade policies and a close alignment with evolving global trends.
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