Exports of textiles saw a sharp contraction of 9.5 per cent year on year (YoY) in September-October this year. Readymade garment exports also remained weak.
India’s external sector is showing mixed signals as merchandise exports lose momentum amid tariff-related disruptions, according to a CareEdge Ratings report, which noted that services exports continue to provide critical support to the country’s current account position.
Exports of textiles saw a sharp contraction of 9.5 per cent YoY in September-October.
Garment exports also remained weak.
“Looking ahead, as merchandise exports navigate a challenging environment, we expect the services trade surplus and transfers to maintain their support. This, coupled with benign global crude oil prices, is likely to keep India’s current account deficit broadly manageable at around 1 per cent of GDP in FY26.” the report said.
Though the country’s export environment gained from front-loading in the initial months of fiscal 2025-26 (FY26), it started softening since September. Non-petroleum exports contracted by 3.9 per cent during September-October, reversing the 7.3-per cent growth seen during the April-August period, the report noted.
The slowdown followed the 50-per cent US reciprocal tariffs imposed from August end.
CareEdge stated that though exports to the United States dropped sharply, the slide was partially cushioned by higher shipments to the United Arab Emirates, Hong Kong and China. It is, however, too early to confirm whether these trends point to a structural reorientation of India’s export markets, it noted.
On the import side, India has registered a robust 6.8 per cent growth during April-October FY26.
Fibre2Fashion News Desk (DS)
