In a surprising turn of events, India’s merchandise trade deficit soared to an all-time high of $31.46 billion in October, marking a substantial increase from $19.37 billion in September. This figure surpassed the earlier estimated deficit of $20.50 billion, as indicated by a Reuters poll of economists.

The surge in the trade imbalance is attributed to a noteworthy 6.2% surge in exports, reaching $33.57 billion. However, this positive momentum was overshadowed by a significant rise in imports, totaling $65.03 billion in October compared to $57.91 billion in the same month last year.

The spike in global crude oil prices played a pivotal role in driving up the import bill, while gold imports recorded a notable 5.5% increase, amounting to $29.48 billion.

Commerce Secretary Sunil Barthwal identified the trade data for October as indicative of ‘green shoots’ of recovery in outbound shipments. Despite the current impact of sluggish global demand on India’s trade, the Finance Ministry remains optimistic about a rebound in the second half, emphasizing the nation’s “comfortable” forex reserve position and “robust” external account.

Exports, particularly in the drugs and pharmaceuticals sector, demonstrated resilience with a 29.31% year-on-year growth, totaling $2.42 billion. Engineering goods exports also registered an uptick of 7.2% at $8.09 billion. Electronic goods exports experienced substantial growth, surging by 28.23% to $2.38 billion in October 2023 compared to $1.85 billion in the same period last year.

The government’s statement highlighted the significant contributors to export growth, encompassing drugs & pharmaceuticals, engineering goods, electronic goods, cotton yarn/fabs./made-ups, handloom products, iron ore, ceramic products & glassware, and meat, dairy & poultry products.