India’s Export Surge in November: Too Early to Celebrate?    

India’s merchandise exports in November rose 19.4% year-on-year to $38.13 billion, raising hopes that the trade story might be turning around despite the high tariffs imposed by the Trump administration in the US. 

Not surprisingly, the data released by the Ministry of Commerce and Industry made headlines in newspapers this morning with a celebratory tone. But is this a blip or a structural change? Why did the rupee-dollar rate slip further in morning trade despite the strong trade data?

The truth, as always, may lie in the middle.

Base Effect
A good part of the year-on-year growth in exports in November can be attributed to a lower base. In November 2024, exports fell to $31.94 billion from $39 billion in the preceding month.

However, if we compare this November’s exports with October 2025, the growth rate moderates to 10.9%. The cumulative data for the first eight months of the current fiscal year also suggests only moderate pick-up. Merchandise exports during April-November this year totaled $292 billion, up 2.6% from $285 billion in the same period a year ago.

More importantly, the growth number for November is not evenly spread. It is driven by a few categories and a few destinations, which brings into question if the trend could be sustained through coming months. In fact, most of the jobs-creating export industries continue to struggle.

The commerce ministry’s update said, the growth in November was driven primarily by five categories: engineering goods, electronic goods, gems and jewellery, drugs and pharmaceuticals and petroleum products. Here too, there are significant divergences between year-on-year and month-on-month changes.

Engineering goods, which account for nearly 30% of India’s exports, registered a year-on-year growth of 23.9% in November, but the month-on-month change was lower at 17.6%. Similar trend is also visible in electronic goods,  gems and jewellery, and drugs and pharmaceuticals. Export of petroleum products in November was almost unchanged from October, although it was 11.6% higher year-on-year.

Also, petroleum products and gems and jewellery are mostly re-exported from India and their performance, therefore, adds little to the core momentum of the economy. The growth in electronics exports too has a minimal bearing on the larger economy, given that much of it is on account of export of assembled smartphones, mostly by Apple. It may be noted that Trump has kept smartphone imports from India out of the purview of his punitive tariffs.

Out of the 30 main export categories, for as many as 13 groups, the cumulative value of exports in April-November 2025 remains lower or nearly unchanged compared to the same period a year ago. These include mostly farm goods such as rice, oilseeds, tobacco and labour-intensive exports such as cotton, yarn, garments and handicraft.

Nonetheless, the performance of exports of engineering goods offer a silver lining, coming as it does against many odds, including the tariffs levied by the US. A part of this resilience may be attributed to success in diversifying export destinations and, therefore, offers crucial pointers for government intervention. The industry’s demand for expeditious implementation of the ₹250 billion aid package promised by the government needs urgent attention.

US Rebound, China Surge
The statement from the Ministry of Commerce and Industry has sought to highlight the year-on-year growth in exports to the United States and China, but these could be misleading.

Exports to China in November nearly doubled from a year ago. Although the ministry didn’t give details, the data showed that the surge in China’s imports from India coincided with a similar spike in iron ore exports. In other words, it is unlikely that there was any major change in export of value-added manufacturing goods to China.

In the case of the US, exports in November rose 22.6% year-on-year to $6.98 billion. Compared to the preceding month of October, it was, however, higher by 10.7% — much of which could be on account of import of smartphones. The bump could very well be temporary. Exports to the US had seen double-digit contraction through September and October, after the 50% tariff came into force.

With a trade deal between India and the US looking distant, Indian exporters continue to battle high tariffs.

To make it worse, Mexico decided last week to levy 50% tariff on all imports from countries with which it doesn’t have a free trade agreement. Although the move is aimed at China, which uses the Mexico route to tap the American market, it will also affect India.

Mexico is an important destination for steel, electronics and pharmaceutical exports by Indian companies. It’s also the third-largest importer of passenger cars from India.

The ministry’s statement also pointed to the sustained high growth in exports to Spain, which stood at 181% and 54% for November and the April-November period.

There should be no surprise here. The spike comes on the back of rerouting petroleum exports to European countries. Earlier, Indian companies routed Russian oil to Europe mostly via the Netherlands. After the Dutch opted to shun Russian oil following Trump’s demand, India switched to route such exports through Spanish ports.

In fact, the increase in shipments through Spain has so far not fully offset the fall in exports to the Netherlands, which has seen its imports from India during April-November decline more than 21% from the same period a year ago.

As pointed out in an earlier article, India’s exports with many of its major trading partners have not been doing well. Its exports to eight of its 20 top destinations in the April-November period have contracted year on year.

Whether India’s exports in 2025-26 expand or contract will hinge on its ability to reverse this trend, besides brokering a trade deal with the US as early as possible.