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New Delhi: India’s merchandise trade deficit narrowed to $21.88 billion in May from $26.42 billion in the previous month due to lower imports even though trade in services showed robust surplus, as per official data released on Monday.
Goods exports as well as imports in May were lower when compared with the same month last year. The merchandise exports in May stood at $38.73 billion, 2.17 per cent down from $39.59 billion in May 2024.
India’s imports dropped by 1.7 per cent year-on-year to $60.61 billion in May.
Overall trade deficit, merchandise and services put together, narrowed to $6.62 billion in May from $9.35 billion recorded in the same month last year.
Briefing media, Commerce Secretary Sunil Barthwal said the decline in exports in May was largely due to lower prices of petroleum products. Non-petroleum exports jumped by 5.1 per cent during the month under review.
“Despite the global policy uncertainty regarding trade, we have done extremely well,” Barthwal said.
He said in services trade India recorded a surplus of $14.65 billion in May. India’s services exports jumped to $32.39 billion in May while services imports during the month were pegged at $17.14 billion.
For the first two months of the current financial year, the cumulative value of merchandise exports stood at $77.19 billion, while imports at $125.52 billion.
India’s overall exports (merchandise and services combined) increased by 2.8 per cent to $71.12 billion in May. The growth in services exports were driven by software, consultancy, and financial services, said S C Ralhan, President, Federation of Indian Export Organisations (FIEO).
“Exporters are adapting well to a tough global environment. The ability to sustain export growth despite logistical disruptions, especially in the Middle East, is a testament to the sector’s agility and policy support,” said Ralhan.
EEPC India Chairman Pankaj Chadha said engineering exports have been impacted due to the US tariffs and global uncertainties.
“Uncertainty has only been mounting due to geopolitical tensions in key parts of the world. The latest Israel-Iran conflict threatens to multiply the challenges for the exporting community,” said Chadha.
“Apart from a rise in input costs as a result of a jump in crude prices, there is heightened concern around the blocking of the Straits of Hormuz by Iran in case tensions further intensify. In that case, logistics costs could surge significantly,” he added.