Trade deficit narrows to $21.88 billion in May, shows Commerce Ministry data

India's commerce ministry detailed the trade figures for May on June 16

India’s trade deficit for May 2025 narrowed to $21.88 billion from a five-month high of $26.42 billion in April as merchandise imports moderated.

The merchandise trade deficit for last month was also lower than the year ago figure of $22.09 billion, Commerce Ministry said on June 16.

Merchandise exports fell 2.2 percent on-year to $38.73 billion in May, along with a drop of 1.76 percent in imports at $60.61 billion, as per provisional data released.

The trade deficit improved even as the global trade setup remains under the strain of US President Trump's Liberation Day tariffs, amid ongoing talks to thrash out a trade deal with US along with EU and others key trading partners.

Sectors that have done well include electronic goods exports, inorganic and organic chemicals, pharma, ready-made garments, Commerce Secretary Sunil Barthwal said. He added that India will continue with the policy of focussing on six key sectors that make up 75 percent of global imports.

"In terms of strategy, we are focusing on certain countries which represent more than 65 percent of the global imports and are also exploring new markets," Barthwal added.

Barthwal said India is doing 'much better than the global average', when one looks at the global picture and the forecast by the WTO. Significantly, India's non-petroleum merchandise exports have seen a positive growth in May, led by electronic goods, chemicals, and garments.

On a cumulative basis, merchandise exports during April-May of the current fiscal increased to $77.19 billion as compared to $74.89 billion during the same period in FY25. Goods imports too rose to $125.52 billion versus $116.16 billion.

Therefore, merchandise trade deficit during the first two months of FY26 came in at $48.33 billion as compared to $41.27 billion during April-May 2024.

On the services trade front, the estimated value of exports for May 2025 is $32.39 billion versus $29.61 billion in the same month last year, while imports are seen at $17.14 billion as compared to $16.88 billion.

As a result, India’s total exports (merchandise and services) for May 2025 is estimated at $71.12 billion, registering a positive growth of 2.77 percent on-year.

Total imports (merchandise and services combined) for May 2025 is seen falling 1.02 percent to $77.75 billion.

Cumulatively, merchandise and services exports during April-May 2025 is seen at $142.43 billion, as compared to $134.69 billion on-year leading to an estimated growth of 5.75 percent. Total imports are expected at $159.57 billion, registering a growth of 6.52 percent.