India's Exports Dip 2.17 % to $38.73 Billion in May; Trade Gap Shrinks to $21.88 Billion

After registering a positive growth for two months, India's exports slipped into negative territory again, contracting 2.17 per cent year-on-year to $38.73 billion in May due to a fall in petroleum goods' shipments, while trade deficit narrowed to $21.88 billion during the month.

According to government data released on Monday, imports declined 1.7 per cent year-on-year to $60.61 billion during the month under review due to fall in the inbound shipments of gold and crude oil.

Cumulatively, during April-May 2025-26, exports increased by 3.11 per cent to $77.19 billion, while imports rose by 8 per cent to $125.52 billion, the data showed.

The trade deficit was $48.33 billion during the period.

The dip in exports and imports narrowed the trade deficit, the difference between the value of imports and exports, in May. The gap was USD 22.51 billion in the same month last year and at $26.42 billion in April.

The fall in merchandise shipments can be attributed to increasing global uncertainties. The Iran-Israel war could further dampen the prospects.

The commerce ministry is holding an inter-ministerial meeting along with stakeholders this week to discuss what can emerge out of this conflict.

The main export sectors which recorded negative growth during the month included rice, iron ore, gems and jewellery, engineering, and certain textile segment goods. Exports of petroleum products declined by 30.32 per cent to $5.6 billion in May.

Similarly, crude oil and gold imports decreased by 26.14 per cent and 12.6 per cent to $14.75 billion and $2.5 billion, respectively.

However, exports of tea, coffee, spices, ready-made garments of all textiles, chemicals, marine products, and pharma have registered positive growth. Electronic goods' shipments rose 54.1 per cent to $45.7 billion in May.

Briefing the media on the data, Commerce Secretary Sunil Barthwal said that despite global uncertainties, India is doing good on the exports front.

"Despite the global policy uncertainty regarding trade, ongoing conflicts, we have done extremely well (during the April-May period)," he said, adding petroleum prices are volatile.

During the last two months, crude oil prices have dipped and it has a "dampening" impact on exports, he added.

"If you look at the global picture...we are doing much better than the global average," Barthwal said, adding, like last year, the ministry would focus on 20 countries and six sectors.

"We have been in touch with our Missions. We are strengthening our Missions. Currently, all the commerce ministry posts in Missions have been filled up so that there can be a better thrust on trade," he added.

The secretary also said that the ministry is actively pursuing three free trade agreements (FTAs) with the UK (soon to be signed), the European Union and the US.

Talks are on with New Zealand, Peru and Chile.

Federation of Indian Export Organisations (FIEO) President S C Ralhan said that exporters are adapting well to a tough global environment.

Mithileshwar Thakur, Secretary General at AEPC (Apparel Export Promotion Council), said that exports have been keeping the momentum and registering an impressive double-digit growth during this fiscal so far.

The growth in exports to the US, the UK, Germany, Spain, Italy, Netherlands, coupled with impressive performance in countries like Australia, Japan, Korea, Mauritius, has kept the spirit high.

"The industry is upbeat about the news of early conclusion of FTA with the USA and the EU, which are our largest markets," Thakur added.

At the services front, the exports for May are estimated at $32.39 billion as compared to $29.61 billion in May 2024. Imports, on the other hand, rose to $17.14 billion as against $16.88 billion same month last year.