Exports touch record high as diversification pays off

Why in News

India’s merchandise exports reached a record US$49.47 billion in October 2026, while merchandise imports stood at US$89.35 billion.

Prelims Pointers

• Merchandise trade covers physical goods.
• Services trade covers activities such as software services, transport and tourism.
• The current account records:
  1. Trade in goods and services.
  2. Primary income, such as interest and dividends.
  3. Secondary income, such as personal remittances without a corresponding service.
• A merchandise trade deficit occurs when goods imports exceed goods exports. A services surplus can partly offset this deficit.
• Export value depends on both prices and quantities. Higher export earnings do not necessarily mean that export volumes rose by the same proportion.

Prelims Traps

• “The current account records only merchandise trade.” This is incorrect. It also includes services, income and current transfers. (UPSC Prelims 2014)
• “Record merchandise exports necessarily produce a trade surplus.” This is incorrect. A deficit remains if merchandise imports exceed exports.