India's goods exports hit record $49.47 billion in October, but oil and gold push trade deficit to $39.88 billion

India's merchandise exports climbed to a record $49.47 billion in October, according to official trade data released on Friday, 13 November, but a sharp rise in imports pushed the goods trade deficit to its widest level in a year.

Goods imports rose to $89.35 billion from $74.61 billion in September, leaving a merchandise trade deficit of $39.88 billion, up from $30.21 billion the previous month, Reuters and Deccan Chronicle reported. The gap was larger than the $32.25 billion forecast in a Reuters poll of economists.

Record exports

Exports rose from $44.40 billion in September. Trade Secretary Rajesh Agrawal said India had recorded its highest-ever monthly goods exports, pointing to gains in petroleum products, electronics, engineering goods and gems and jewellery. According to Deccan Chronicle, the commerce secretary put year-on-year growth in merchandise exports at about 45 per cent, the fastest in five years, and said 43 of India's top 50 export destinations showed growth.

Services exports were estimated at $40.51 billion. Taken together, India's goods and services exports reached about $89.99 billion in October, also a monthly record, against $69.27 billion a year earlier, The Hans India and Deccan Chronicle reported.

Oil and gold lift imports

The import surge was driven largely by energy. Reuters reported that imports of petroleum products, mainly crude, rose about 54 per cent from a year earlier to $22.82 billion, as the Indian crude basket averaged close to $120 a barrel during the month amid the conflict in West Asia and disruption around the Strait of Hormuz. India buys more than 85 per cent of its crude oil from abroad.

Gold imports more than tripled from September to $5.51 billion, according to Reuters, as buyers stocked up ahead of Diwali. A senior official linked the recovery to softer global prices and festive demand.

Agrawal also said trade negotiations with the United States were on the right track, with teams on both sides engaged, Reuters reported. Commerce Minister Piyush Goyal said exports in the first half of the financial year amounted to about 48 per cent of the government's $1 trillion annual target, The Hans India reported.

Why it matters

A wider goods deficit increases demand for dollars and can add pressure on the rupee, which was trading above 94 to the dollar on Friday. For policymakers already facing retail inflation above 6 per cent, elevated oil prices remain the key risk, though the strong services surplus continues to offset part of the gap in goods trade.