Merchandise exports to increase over 4% in Q2FY25: India Exim Bank

India’s total merchandise exports is expected to reach $111.7 billion, a year-on-year growth of 4.2 percent, while non-oil exports are forecast to amount $89.8 billion with a YoY growth of 6.3 percent during the second quarter (July-September) of FY2025, according to the latest update from the Export-Import Bank of India (India Exim Bank).

India had witnessed a marginal decline in exports (a little over one percent) to $33.98 billion in July because of the continuous, on-going international trade disruptions

 "Positive growth in India’s exports could be as a result of India’s continued strong economic activity backed by sustained momentum in manufacturing and services sector, expected global monetary easing and improving demand prospects in trading partners," the update added.

"The outlook is, however, subject to risks of uncertain prospects for advanced economies, geopolitical shocks, the Middle East crisis, global supply chain disruptions and deepening geoeconomic fragmentation, among other factors. The positive growth rate in total merchandise exports and non-oil exports, as witnessed in the previous three quarters, are likely to continue."

 As part of its continued research initiatives, Exim Bank has developed an in-house model to generate an Export Leading Index (ELI) for India to track and forecast the movement in exports on a quarterly basis. The ELI gauges the outlook for the country’s exports and is essentially developed as a leading indicator to forecast growth in total merchandise and non-oil exports of the country, on a quarterly basis, based on several external and domestic factors that could impact exports of the country.

The forecast of growth in India’s total merchandise exports and non-oil exports are released by Exim Bank on a quarterly basis, during the first fortnight of the months of May, August, November and February for the corresponding quarters, based on its ELI model.

 The next growth forecast for India’s exports for the 3rd quarter of FY 2025 (i.e. October-December 2024) would be released during the first fortnight of November 2024, the update added.

The improvisations to the model and the forecast results have been reviewed by a standing technical committee of domain experts comprising Sunil Kumar, Adviser, Department of Economic and Policy Research, Reserve Bank of India, Mumbai; Saikat Sinha Roy, Professor, Department of Economics, Jadavpur University, Kolkata; N. R. Bhanumurthy, Director, Madras School of Economics, Chennai; and C. Veeramani, Director, Centre for Development Studies, Thiruvananthapuram.