India's trade deficit falls to $21.9B in May
What's the story
India's merchandise trade deficit narrowed to $21.88 billion in May, down from April's $26.42 billion, official data released today has showed.
The figure was lower than economists' expectations of a $25 billion gap, indicating a stronger-than-anticipated performance amid global uncertainties.
The improvement comes as the Indian government actively pursues Free Trade Agreements (FTAs) with various countries and trading blocs.
Export-import balance
Exports stand at $38.73B, imports at $60.61B
In May 2025, India's merchandise exports stood at $38.73 billion, a slight decline from last year's $39.59 billion.
Meanwhile, imports were recorded at $60.61 billion as compared to last year's $61.68 billion year-on-year (YoY).
The data shows a marginal fall in both exports and imports on a yearly basis, reflecting the global economic climate's impact on trade dynamics.
Sector performance
Electronic goods exports surge 54%
The electronic goods sector witnessed a whopping 54% YoY growth in May.
Other sectors such as pharmaceuticals, marine products, and labor-intensive industries like textiles also saw gains during this period.
However, the headline exports fell from $39.59 billion in May 2024 to $38.73 billion in May this year due to declines in petroleum products, gems and jewelry, and cotton yarn exports.
Trade trends
A 5.75% cumulative trade growth for April-May
Despite the monthly decline, India registered a 5.75% cumulative trade growth for April-May 2025, over the same period last year.
The Ministry of Commerce attributed this to higher volatility in petroleum prices due to recent geopolitical developments, which affected both the export and import values in the commodity.
Imports from Russia, Iraq, and Saudi Arabia saw a YoY decline during this period while exports to Netherlands, Singapore, UK, Saudi Arabia, and Bangladesh moderated.
Diplomatic efforts
India is negotiating FTAs with UK, US, EU
The Ministry of Commerce said it is actively engaging with the exporters via regular meetings with Export Promotion Councils (EPCs) and industry stakeholders.
All the trade-related posts in Indian missions overseas have been filled, strengthening India's trade diplomacy.
The country is now negotiating three key FTAs with the UK, EU, and US, and also engaging New Zealand, Peru, and Chile to expand its trade footprint.