Exports up 9% to $38.13 bn in May

New Delhi: India’s merchandise exports rose by 9.1 per cent to $38.13 billion in May even as the trade deficit widened to a seven-month high of $23.78 billion during the month, according to government data.

Healthy growth in sectors such as engineering, electronics, pharmaceuticals, textiles and plastics helped register growth in exports despite global economic uncertainties.

Imports also increased by 7.71 per cent to $61.91 billion in the month under review from $57.48 billion in May 2023 due to increase in crude oil imports.

Oil imports rose by 28 per cent to $20 billion in May. It was up by 24.4 per cent during April-May 2024-25 to $36.4 billion. However, gold imports dipped marginally to $3.33 billion in May this year from $3.69 billion in the same month of FY24.

The previous high in the deficit was recorded in October 2023 at $31.46 billion. In April 2024, the outbound shipments dipped to $41.68 billion from $41.96 billion a year ago.

Cumulatively, exports during April-May this fiscal rose by 5.1 per cent to $73.12 billion and imports rose by 8.89 per cent to $116.01 billion. Briefing media on the data, Commerce Secretary Sunil Barthwal said May has been an excellent month in terms of exports and “I hope that this trend will continue”.

He said that inflation in advanced economies is slowing and it would help further push purchasing power that will raise demand for imports.

“I feel that this positive trend will continue. Things are looking better and optimistic for the trade sector,” Barthwal said.

Asked whether he is concerned about the widening trade deficit, the secretary said as India is registering higher economic growth than the world, it will lead to increase in domestic demand for imports and dip in exportable surplus.

“Trade deficit per se I do not consider it as bad as long as you have FDI flowing in, foreign exchange coming in and if you are balancing it through other means. And secondly we should also look at the growing services exports...then we should not unnecessarily be worried about the trade deficit in merchandise,” Barthwal added.

According to the commerce ministry data released on Wednesday, the estimated value of services export in May is $30.16 billion as compared to $26.99 billion in May 2023.

Imports of services are estimated to have increased to $17.28 billion during the month as compared to $15.88 billion in May 2023. India’s shipment to top five export destinations - the US, the Netherlands, UAE, Malaysia, and the UK - recorded healthy growth in May.

Moreover, India’s imports from Iraq rose 58.68 per cent to $3.76 billion in May, while from the UAE, the country’s inbound shipments increased by about 50 per cent during the month, according to the commerce ministry data. Similarly from Russia, the imports rose by 18 per cent to $7.1 billion on account of oil imports.

The data showed that the inbound shipments from China during the month were 2.82 per cent higher at $8.48 billion.

Among the top 20 import source nations of India, imports from Saudi Arabia, Switzerland, Japan, Germany, Hong Kong, Australia and Malaysia recorded negative growth in May.

On the export front, India’s exports to South Africa, Italy, Nepal, Belgium and Australia recorded a negative growth rate during the month under review.

However, exports to the US, the UAE, the Netherlands, the UK, Singapore and Saudi Arabia have recorded positive growth.

The outbound shipments to China rose by 3.35 per cent to $1.32 billion in the last month.

India’s overall merchandise exports rose by 9 per cent to $38.13 billion in May.