India’s May exports surge 9.1% to $38.13B; the trade deficit reaches a 7-month high at $23.78B amid sector growth and rising oil imports.
India’s merchandise exports showed resilience in May, increasing by 9.1% to reach USD 38.13 billion, despite global economic uncertainties. This growth was underpinned by strong performances in sectors such as engineering, electronics, pharmaceuticals, textiles, and plastics.
However, the trade deficit widened to USD 23.78 billion, marking a seven-month high, as imports also rose by 7.7% to USD 61.91 billion. The increase in imports was primarily driven by a significant rise in crude oil imports, which surged by 28% to USD 20 billion during the month.
Gold imports, on the other hand, saw a marginal decline to USD 3.33 billion in May from USD 3.69 billion a year ago. Despite these dynamics, India’s cumulative exports for April–May 2024–25 stood at USD 73.12 billion, reflecting a 5.1% growth compared to the same period last fiscal year. Similarly, imports rose by 8.89% to USD 116 billion during the same period.
Commerce Secretary Sunil Barthwal, briefing the media, expressed satisfaction with May’s export performance and expressed optimism about continued positive trends. He highlighted that while the trade deficit widened, India’s economic growth outpaced global trends, driving increased domestic demand for imports.
Barthwal emphasized that the positive momentum in exports is expected to continue, buoyed by improving global economic conditions and growing demand from key markets. He also noted the role of service exports, which grew to USD 30.16 billion in May, up from USD 26.99 billion a year ago, indicating a broader contribution to India’s trade balance.
Industry experts, including Easwaran from Deloitte India and Ashwani Kumar from FIEO, echoed optimism about India’s export outlook, citing strong order bookings and recovery signals from major global markets like the European Union, UK, West Asia, and the US.
Despite geopolitical tensions impacting international trade, Kumar highlighted the resilience of Indian exporters and anticipated further growth in labor-intensive sectors. He underscored the significance of strategic initiatives like FTAs and production-linked incentives (PLIs) in sustaining export growth and enhancing India’s participation in global value chains.
