After a steep 11.8% fall in October and record trade deficit, India’s merchandise exports stage a sharp recovery in November as the government banks on FTAs, resilient growth and strong forex reserves.
After a worrying October, when India’s exports contracted 11.8% to USD 34.38 billion, the commerce establishment in New Delhi is sounding distinctly more upbeat. Commerce and Industry Minister Piyush Goyal has indicated that November has brought a strong comeback for merchandise exports, reversing the sharp fall recorded just a month earlier.
Without disclosing the exact numbers ahead of the official data release on December 15, Goyal said exports in November have grown by an amount larger than October’s decline. In simple terms, if October was a setback, November appears to have more than compensated for it.
According to the minister, when October and November are taken together, merchandise exports are in positive territory. This is a significant signal at a time when global trade is still grappling with geopolitical tensions, protectionist policies, and demand uncertainty in key markets.
The optimism on November comes against the backdrop of some uneasy numbers from October. India’s exports shrank 11.8% to USD 34.38 billion, weighed down by weaker global demand and the impact of higher tariffs imposed by the United States on certain product categories.
At the same time, India’s trade deficit widened to an unprecedented USD 41.68 billion. The main culprit: a surge in gold imports, which swelled the import bill and overshadowed the marginal growth in exports on a fiscal year basis. Between April and October, exports grew just 0.63% to USD 254.25 billion, while imports rose 6.37% to USD 451.08 billion.
This widening gap underscored twin concerns: external vulnerability and pressure on the rupee. The external sector suddenly looked fragile, making November’s performance even more critical.
Complicating the picture is the rupee’s slide. The currency hit a historic low of 90.15 against the US dollar, unnerving markets and reviving fears of imported inflation, especially via costlier fuel, raw materials, and essential imports.
Yet the government is keen to project stability and confidence. Goyal pointed to India’s broader macroeconomic strength, arguing that the currency movement must be seen in context. He highlighted that India’s GDP growth of 8.2% in the second quarter had beaten most estimates, underlining the economy’s underlying momentum.
He also cited some reassuring pillars: the lowest inflation in recent months, robust foreign exchange reserves, steady capital inflows, and strong investments in infrastructure. Consumer spending, he added, remains buoyant, with all key levers of the economy showing “a great deal of positivity”.
Beyond immediate trade numbers, the government is framing the export rebound as part of a larger strategy: deeper integration with global markets through a network of free trade agreements (FTAs). Goyal hinted that India is on the cusp of “many successful engagements” with major trading partners.
India is currently negotiating FTAs with several countries and regions, including the United States, European Union, New Zealand, Oman, Chile, and Peru. Each of these potential deals carries its own strategic weight — from access to advanced markets and technology to diversification of export destinations in Latin America and the Indo-Pacific.
The implicit message is clear: India wants to shift from being a passive participant in global trade to a rule-shaping player, using FTAs as instruments to boost exports, attract investments, and secure supply chains.
The picture emerging from Goyal’s remarks is one of cautious optimism. On one side, the reality of an October export slump, record trade deficit, and a rupee at historic lows has exposed vulnerabilities. On the other, a strong rebound in November exports, healthy forex reserves, 8.2% GDP growth, and low inflation are being showcased as proof of resilience.
The official export and import figures for November, due on December 15, will be critical in validating this narrative. If the data confirms the “greater than October decline” recovery that Goyal has hinted at, it will strengthen the government’s claim of India navigating global turmoil with relative stability.
Until then, India’s external sector remains in a delicate balancing act: pushing for higher exports through FTAs and competitiveness, while managing currency volatility, trade imbalances, and global headwinds that show no signs of easing.
