India’s exports have shown resilience despite challenging circumstances, reports CRISIL, but sustaining this trend remains uncertain. In January, merchandise exports rose by 3.1% year-on-year to $36.92 billion, a noteworthy improvement from December's 1.0% growth. According to CRISIL, this positive performance can be attributed partly to proactive government support measures such as enhanced access to credit and efforts to address non-tariff barriers and sanitary issues.

However, caution is advised as global tensions and uneven growth persist. Some core export sectors experienced softening demand in January, including electronic goods, engineering goods, and pharmaceuticals. Agricultural exports also faced pressure, partially due to restrictions on rice exports.

On a positive note, exports of petroleum products rebounded with a 6.6% increase to $8.21 billion, while chemical exports showed mild growth after fifteen months of contraction. Overall, core exports (excluding oil and gold) grew by 2.5% year-on-year in January.

Cumulatively, India's merchandise exports have declined by 4.8% year-on-year in the April-January period of the fiscal year, amounting to $354.04 billion compared to $372.1 billion the previous year.

Despite the challenges, India's exports are displaying resilience, supported by a depreciating rupee, which aids competitiveness. However, imports are also on an upward trajectory, growing by 3% year-on-year to $54.41 billion in January. Notably, petroleum and crude products imports turned positive, rising by 4.3% year-on-year.

While services exports continued to grow positively, merchandise imports contracted by 6.9% year-on-year, helping narrow the merchandise trade deficit to $17.49 billion in January.

Looking ahead, sustaining export growth amidst global headwinds remains a key challenge. The impact of disruptions caused by geopolitical tensions on export prices will require monitoring. Despite these uncertainties, forecasts by major multilateral organizations indicate better trade growth prospects for the current year. Additionally, India's current account deficit is expected to remain manageable, supported by robust services trade surplus and healthy remittances.