Despite significant growth in exports, India’s trade deficit widens in May on rising imports

NEW DELHI: Despite significant growth in exports, India’s trade deficit widened in May 2026 on account of a sharper rise in imports, according to estimated trade data for the month released by the Ministry of Commerce and Industry.

As per the data both merchandise and services trade expanded year-on-year, but higher import bills outpaced export gains. Overall trade, combining merchandise and services, saw exports rise to USD 81.96 billion in May 2026 from USD 70.76 billion in May 2025, marking double-digit growth.

However, imports grew faster, climbing to USD 92.47 billion from USD 77.55 billion a year ago. As a result, the trade deficit widened to USD 10.51 billion in May 2026, up from USD 6.79 billion in May 2025.

Merchandise exports touched a new record high of USD 45.20 billion in May 2026, compared to USD 38.30 billion in the same month last year. The figure was highlighted as a “new record high of monthly Merchandise Export @US$ 45.20 billion” in the data released by the ministry.

However, merchandise imports also jumped sharply to USD 73.41 billion from USD 60.86 billion in May 2025. The faster increase in imports meant the goods trade gap remained a key driver of the overall deficit.

Services trade also showed strength. Services exports rose to an estimated USD 36.76 billion in May 2026 from USD 32.46 billion in May 2025. Services imports increased to USD 19.06 billion from USD 16.70 billion. The services surplus continues to cushion the merchandise deficit, but the net impact was not enough to prevent the overall trade gap from widening.

The trend points to robust external demand for Indian goods and services, with merchandise exports hitting a monthly peak. At the same time, higher imports reflect stronger domestic demand and elevated commodity prices. The widening deficit to USD 10.51 billion from USD 6.79 billion a year earlier will be watched closely, even as record merchandise exports provide support to India’s external sector. (ANI)