India's export sector delivered a stellar performance in November, registering its fastest growth rate in more than three years. Official data reveals that exports surged by a robust 19.4% to reach $38.1 billion for the month. This impressive rebound was significantly aided by a simultaneous 2% contraction in imports, which fell to $62.7 billion. The combined effect led to a welcome narrowing of the trade deficit, which shrunk to $24.6 billion, marking its lowest point since June of this year.
Key Drivers and Shifting Trade Destinations
The resurgence was powered by a remarkable increase in shipments to two of the world's largest economies. Exports to the United States are estimated to have climbed 22.6% to $7 billion in November. This growth is particularly notable as it occurred despite the impact of additional 50% tariffs imposed by the US on certain Indian products. Commerce Secretary Rajesh Agrawal highlighted this resilience, stating, "Despite the tariffs we have been able to hold our exports and imports are also growing (38% to $5.3 billion), which is a good thing for India-US trade."
An even more dramatic rise was seen in trade with China. The value of Indian consignments to China skyrocketed by 90% to $2.2 billion. This surge was so significant that in November, China overtook the Netherlands to become India's third-largest export destination. However, for the cumulative period from April to November, the European nation still holds a marginal lead.
Sectoral Performance and Import Trends
The November comeback was broad-based, led by strong performances across multiple industries. Key sectors that fueled the growth included engineering goods, electronics, gems and jewellery, pharmaceuticals, chemicals, oil products, and most segments of the textiles sector. However, five of the thirty major sectors tracked—rice, oil seeds, plastics, jute products, and carpets—recorded a decline during the month.
On the import side, the 2% overall decline was driven by substantial drops in several key commodities. Gold imports plunged by 59% in November to $4 billion, a stark contrast to the nearly $10 billion imported in the same month a year ago. Crude petroleum imports also fell by 11.3% to $14 billion, and vegetable oil imports dropped by 20% to $1.5 billion. Conversely, sectors like electronics (up 16% to $8.8 billion), silver (up 125% to $1.1 billion), and pearls and precious stones (up 90% to $1.8 billion) saw significant increases.
Analysis and Future Outlook
Economists attribute the contrasting trends of rising exports and falling imports to post-festive season adjustments. Aditi Nayar, Chief Economist at ICRA, pointed to "supply normalisation after the holidays and decreased demand post the festive season" as key factors.
The November surge effectively offset a 12% decline witnessed in October, which had been attributed to the initial shock of US tariffs. Commerce and Industry Minister Piyush Goyal remarked ahead of the data release, "Nov export growth has more than made up for Oct." Secretary Agrawal added that the numbers indicate a strategic shift, with exporters in several sectors actively seeking to diversify their markets to mitigate risks.
The services sector also contributed positively, with services exports estimated to have grown by 11.9% to $35.9 billion in November, while services imports rose by a milder 4% to $18 billion.
Industry leaders are optimistic about sustaining this momentum. S C Ralhan, Chief of the Federation of Indian Export Organisations (FIEO), stated, "Diversification of export markets, along with the continued resilience of several key sectors, has played a crucial role in supporting export growth. With sustained policy support, enhanced logistics efficiency, and access to competitive export financing, India’s exports are well-positioned to maintain this positive trajectory in the coming months."
