The Export-Import Bank of India (India Exim Bank) has provided an optimistic forecast for the country's merchandise exports in the second quarter (July-September) of FY25. According to the bank's quarterly report, India's total merchandise exports are expected to reach US$ 111.7 billion, representing a Year-over-Year (YoY) growth of 4.2%. This forecast underscores the continued resilience of India's export sector amidst a challenging global economic environment.

Growth in Non-Oil Exports

In addition to overall merchandise exports, the report projects that non-oil exports will reach US$ 89.8 billion in Q2 FY25, marking a YoY growth of 6.26%. The positive momentum in non-oil exports reflects the robust performance of India's manufacturing and services sectors, which have been pivotal in driving the country's economic growth. The strong activity in these sectors is expected to continue, contributing to the sustained expansion of non-oil exports.

Factors Influencing Export Performance

The quarterly report from India Exim Bank highlights several factors that are likely to influence export performance in the coming months. Expected global monetary easing is anticipated to create a more favorable environment for international trade, as lower interest rates and improved liquidity conditions could stimulate demand from India's trading partners. Additionally, improving global demand is expected to further bolster India's export performance, particularly in key markets across Asia, Europe, and North America.

However, the report also cautions that geopolitical risks could pose challenges to India's export growth. The ongoing crisis in West Asia, along with global supply chain disruptions and geo-economic fragmentation, are identified as potential risks that could impact the projections. These factors could create volatility in global markets, leading to uncertainty in trade flows and affecting the demand for Indian goods.

Consistent Growth Trend

India's merchandise and non-oil export sectors have shown positive growth for three consecutive quarters, a trend that is expected to continue into the second quarter of FY25. This consistent growth underscores the resilience of India's export sector, despite the external challenges posed by the global economic landscape. The positive outlook for Q2 FY25 reflects the strength of India's economic fundamentals and the effectiveness of policies aimed at promoting export growth.

Export Leading Index (ELI) Model

The projections provided by India Exim Bank are based on its proprietary Export Leading Index (ELI) model, which serves as a leading indicator for tracking and forecasting movements in India's exports. The ELI model is a sophisticated tool that incorporates a wide range of economic variables to generate accurate and reliable export forecasts. It is regularly reviewed and validated by a technical committee of domain experts, ensuring that the projections are robust and well-founded.

The technical committee responsible for reviewing the ELI model includes prominent economists and researchers such as Dr. Sunil Kumar from the Department of Economic and Policy Research at the Reserve Bank of India, Professor Saikat Sinha Roy from Jadavpur University, Professor NR Bhanumurthy from the Madras School of Economics, and Professor C Veeramani from the Centre for Development Studies. Their collective expertise contributes to the credibility and accuracy of the export forecasts provided by India Exim Bank.

Also Read : SEBI Report Reveals the United States as the Largest FPI Holder in India During FY24

Looking Ahead: Q3 FY25 Projections

Looking ahead, the next forecast from India Exim Bank, covering the third quarter of FY25 (October-December 2024), is scheduled for release in the first fortnight of November 2024. This upcoming forecast will provide further insights into the trajectory of India's export sector as the global economic landscape continues to evolve. The ongoing monitoring and analysis by India Exim Bank will be crucial in navigating the challenges and opportunities that lie ahead for India's exporters.

Conclusion

India Exim Bank's projections for Q2 FY25 offer a positive outlook for the country's merchandise and non-oil exports, with anticipated growth driven by strong performance in the manufacturing and services sectors. The expected global monetary easing and improving demand from trading partners are likely to support this growth, although risks such as geopolitical tensions and supply chain disruptions could pose challenges. The Export Leading Index (ELI) model, developed and validated by a team of experts, continues to provide reliable forecasts, guiding India's export strategy in an increasingly complex global environment.

As India continues to strengthen its position in global trade, the country's export sector is poised to play a critical role in driving economic growth and development. The projections for Q2 FY25 reflect the resilience and dynamism of India's economy, as well as the strategic importance of exports in the broader context of national development. With continued support from government policies and international cooperation, India is well-positioned to achieve its export targets and contribute to global economic prosperity.

Check latest IPO Review & analysis, Live GMP today, Live Subscription Status Today, Share Price, Financial Information, latest IPO news, Upcoming IPO News before applying in the IPO. The Upcoming IPOs in this week and coming weeks are Utssav Cz Gold Jewels Limited, Dhariwalcorp Limited, Ola Electric Mobility Limited, Ceigall India Limited, Afcom Holdings Limited, Picture Post Studios Limited IPO.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX & Upstox.