Indian trade: Mechandise exports decline in May; trade deficit narrows to $6.62 billion

India’s total exports including both merchandise and services, climbed to $71.12 billion in May 2025, marking a 2.77% increase compared to the same month last year, data released by the Union commerce ministry showed on Monday. In May 2024, the figure stood at $69.20 billion.While merchandise exports saw a slight dip from $39.59 billion to $38.73 billion, services exports rose notably, reaching $32.39 billion, up from $29.61 billion a year earlier.On the import front, India brought in goods and services worth $77.75 billion in May, marginally down from $78.55 billion last year. The trade deficit also improved, narrowing to $6.62 billion from the $9.35 billion in May 2024.How were the first two months of FY26?During the first two months of the ongoing financial year (April–May 2025), overall exports reached $142.43 billion, up 5.75% against the corresponding period last year. Imports during the same period also rose by 6.52%, increasing from $149.81 billion to $157.57 billion. However, this growth widened the trade deficit slightly to $17.14 billion, compared to $15.12 billion in the year-ago period.India’s overall exports achieved a record-breaking performance in 2024–25. The country’s total exports hit an all-time high of $824.9 billion, exceeding the initial target of $800 billion and registering a 6.01% growth against the previous year’s $778.1 billion.A major contributor to this surge was the services sector, which registered a historic high of $387.5 billion in exports, an impressive 13.6% rise from the previous fiscal’s $341.1 billion. Meanwhile, merchandise exports recorded a marginal increase to $437.42 billion.Despite this export growth, the country’s overall trade deficit widened in 2024–25 to $94.26 billion, compared to $78.1 billion the previous year.The government’s production linked incentive (PLI) scheme, rolled out across sectors such as electronics, has been crucial in boosting India’s manufacturing competitiveness, drawing foreign investments, and reducing reliance on imports. These targeted efforts appear to be bearing fruit, reflected in the recent uptick in exports.