As India's external sector continues to be hit by a complex global environment, the persistent strength in services exports provides an important counterbalance to the volatility in merchandise trade, the Department of Economic Affairs of Ministry of Finance said in its monthly economic review on Thursday.
During the period April-October FY26, India’s total exports registered a growth rate of 4.8% YoY, reaching USD 491.8 billion. While merchandise exports have grown by 0.6% YoY, non-petroleum, non-gems and jewellery exports registered a growth of 4.6% YoY.
On the other side, services exports grew by 9.7% YoY during the period, reaching USD 237.6 billion. This strength in the services exports has generated a net services surplus of USD 118.7 billion. As a result, the total trade deficit stands at USD 78.2 billion.
In October 2025, the services trade continued to provide thrust to India’s trade performance as services exports increased by 11.9% YoY, amounting to USD 38.5 billion. This represents the highest level of service exports recorded in a single month. Services imports increased by 8.2%. As a result, the net of services trade increased by 15.7% (YoY), amounting to USD 19.9 billion.
Overall, the services trade surplus covered 48% of the merchandise trade deficit and therefore, the total trade deficit amounted to USD 21.8 billion in October 2025.
On the imports side, total imports grew by 5.7% YoY, reaching USD 570 billion, with merchandise imports registering a growth of 6.4% YoY. The increase was driven by non-petroleum, non-gems, and jewellery imports, which grew by 8.2% YoY. In contrast, the petroleum, crude and products imports fell by 4.5% YoY, on the back of a 13.4% YoY fall in the average crude oil price.
This import pattern indicates a robust domestic demand within the economy. Concurrently, service imports, which are valued at USD 118.9 billion in April-October FY26, registered a growth of 3.4% (YoY).
ndia's growth to be sustained in 2025-26 by rural, urban demand:
As per Finance Ministry's Monthly Review Report of October 2025, India will withstand trade-related uncertainties and maintain growth through the rest of 2025-26 (April-March), with the help of strong demand, steady public spending and easing inflation.
Macroeconomic developments in October indicate a stable and resilient domestic economy, supported by easing price pressures and firm consumption trends, said the report.
However, the external environment continues to face elevated trade-policy uncertainty, and "global uncertainties warrant continued vigilance," it said.
As India's biggest trade partner US doubled tariffs on certain Indian imports to 50% in late August over New Delhi’s Russian oil purchases, the government is looking for ways to stabilise the economy with self-reliance in both, production and consumption.
To cushion the economy from trade-related uncertainties, the government has announced a Rs 25,060 crore support package for exporters and GST tax cuts to boost demand.
Rural consumption continued to strengthen on favourable agricultural income and healthy crop output while recovery in urban consumption gained momentum post tax cuts, the report said.
Retail inflation in October slumped to a record low of 0.25% in October, driven by a sharp fall in food prices and tax cuts on consumer goods.
According to a Reuters poll, India's economy is projected to grow at 7.3% in the July–September quarter, underpinned by strong rural and government expenditure even as private capital spending remained subdued.
Source Name : Economic Times