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 the export surge signals strong global demand for Indian goods, a simultaneous rise in imports has kept the trade deficit at a significant level.

Robust Export Growth and Cumulative Performance

According to the latest data from the Commerce Ministry, India's merchandise exports reached $45.2 billion in May, marking an 18% increase compared to the same month last year. This momentum is not isolated to a single month; the cumulative merchandise exports for the April-May period of the 2026-27 fiscal year have hit $88.91 billion. This represents a healthy 16.09% growth over the corresponding period in the previous fiscal year.

Commerce Secretary Rajesh Agrawal expressed optimism regarding these figures, noting that current market trends point toward a highly positive year for India’s export sector. The sustained upward trajectory suggests that Indian manufacturers and exporters are successfully navigating global market dynamics.

Import Surge and the Widening Trade Deficit

Despite the strong export performance, India’s import bill saw an even sharper increase. Imports rose by 20.62% in May, climbing to $73.41 billion. This disproportionate rise in imports relative to exports resulted in a trade deficit of $28.21 billion for the month.

A significant driver behind the rising import costs is the surge in precious metals. Data reveals that gold imports during the first two months of the current fiscal year skyrocketed by 60%, totaling $9.04 billion. This spike in high-value commodity imports remains a critical factor in the widening gap between the nation's outflows and inflows of goods.

Resilience in West Asian Trade Markets

A key highlight of the May trade data is the stability of India's trade relations with West Asia. Despite ongoing geopolitical tensions and developments in the Middle East region, which often disrupt global supply chains, India’s export footprint in the area remained largely steady.

Exports to the Middle East stood at $5.30 billion in May, showing remarkable resilience when compared to the $5.38 billion recorded in May 2025. This stability underscores the strength of India's trade ties with its West Asian partners and the ability of Indian exporters to maintain volumes despite regional volatility.

Key Takeaways