India’s Merchandise Exports Surge 18% in May Amid Rising Imports

India's merchandise exports witnessed a robust growth of 18% year-on-year in May, reaching $45.2 billion. While this upward trajectory signals strength in global demand for Indian goods, a simultaneous rise in imports has pushed the trade deficit to $28.21 billion for the month.

Strong Export Growth and Cumulative Performance

According to the latest data from the Commerce Ministry, the 18% jump in monthly exports highlights a resilient performance by Indian exporters. This momentum is not limited to a single month; the cumulative merchandise exports for the April-May period of the 2026-27 fiscal year reached $88.91 billion. This represents a healthy 16.09% increase compared to the same period in the previous year.

Commerce Secretary Rajesh Agrawal expressed optimism regarding these trends, noting that the current trajectory suggests a positive year ahead for India's external sector. The consistent growth in cumulative figures indicates that the Indian export engine is gaining significant traction despite various global economic headwinds.

Trade Deficit and the Surge in Gold Imports

Despite the impressive export numbers, India's import bill also saw a significant uptick. Imports rose by 20.62% in May, totaling $73.41 billion. This surge in imports has resulted in a trade deficit of $28.21 billion for the month.

A major driver behind the widening import gap is the massive spike in gold procurement. During the first two months of the current fiscal year, gold imports surged by a staggering 60%, amounting to $9.04 billion. Such high-value commodity imports often exert pressure on the trade balance, even when manufacturing and service exports are performing well.

Resilience in West Asian Markets

A key highlight of the May trade data is the stability maintained in the West Asian corridor. Despite ongoing geopolitical tensions and developments in the Middle East, India’s trade with the region has remained largely steady.

Commerce Secretary Agrawal noted that exports to the Middle East stood at $5.30 billion in May, showing minimal fluctuation compared to the $5.38 billion recorded in May 2025. This stability in a volatile region underscores the strength of India's trade relationships and the diversified nature of its export basket, which helps mitigate risks associated with regional geopolitical shifts.

Key Takeaways