India's merchandise exports rose 0.5 per cent year-on-year in September to $34.58 billion, marking a slight recovery after two months of declines, official data showed on Wednesday.

Imports also increased by 1.6 per cent to $55.36 billion, narrowing the trade deficit to a five-month low of $20.78 billion, compared to a 10-month high of $29.65 billion in August.

"We have done well despite global difficulties," said Commerce Secretary Sunil Barthwal, highlighting positive growth in exports during the first half of the fiscal year. Exports from April to September rose 1 per cent to $213.22 billion, while imports grew by 6.16 per cent to $350.66 billion. The trade deficit for the period stood at $137.44 billion.

Barthwal cited engineering, chemicals, plastics, pharmaceuticals, ready-made garments, and electronics as key drivers of export growth. "Despite global uncertainties, India's exports are showing resilience," he added.

Gold imports rose to $4.39 billion in September, up from $4.11 billion a year earlier. In contrast, oil imports fell by 10.44 per cent to $12.53 billion, though they increased by 5.91 per cent to $88.91 billion during the April-September period. Silver imports surged more than threefold to $325.66 million in September, and cotton raw and waste imports also jumped to $134.20 million.

On the escalating conflict in West Asia and its impact on shipping, Barthwal acknowledged some temporary issues but emphasized the government's focus on long-term solutions. "We are looking at how we can improve India's share in global shipping transport," he said.

Despite the slight recovery, some sectors continued to struggle. Petroleum product exports fell 26.67 per cent in September to $4.73 billion and declined by 12.48 per cent during the first six months of the fiscal year. Other sectors in the negative zone included gems and jewellery, marine products, and iron ore.

However, shipments of electronic goods provided a bright spot, rising 7.89 per cent to $2 billion in September and surging 19.74 per cent to $15.64 billion during the first half of the fiscal year.

Ashwani Kumar, president of the Federation of Indian Export Organisations (FIEO), said, "Merchandise exports are back in positive territory, even amidst rising geopolitical tension and economic uncertainties." He also stressed that trade finance challenges continue to affect MSMEs, impacting the competitiveness of Indian products globally.

China remained India's top import source, with imports from the country rising 11.5 per cent to $56.29 billion during April-September. The U.S. remained the largest export destination, with shipments increasing 5.62 per cent to $40.38 billion over the same period.