India's merchandise exports rose 18% year-on-year to a six-month high of $45.2 billion in May, according to ET Retail. The growth came as the trade deficit widened to $28.21 billion from $22.56 billion a year ago, driven by a higher net oil import bill amid surging global energy prices.
Record Exports and Widening Trade Deficit
Goods imports grew 20.62% on-year to $73.41 billion in May, according to ET Retail. The goods trade gap in April was $28.38 billion. Commerce Secretary Rajesh Agrawal said that going by the trend, "this year will be good for exports despite global geopolitical uncertainties." He expressed optimism for fiscal year FY27 if the export momentum continues.
Key Import Commodities: Oil, Gold, Electronics
Petroleum and crude imports surged 53% on-year to $22.6 billion in May, followed by inbound electronics shipments worth $12.3 billion, ET Retail reported. Gold imports rose 34% on-year to $3.4 billion, but were down 40% sequentially from $5.63 billion in April. The sequential decline followed India's decision to raise the import duty on gold and silver to 15% from 6% on May 13, 2026.
Gold imports during the first two months of the fiscal year surged 60% on-year to $9.04 billion, while crude oil imports rose 16.5% to $41.3 billion, according to ET Retail.
West Asia Crisis and Trade Recovery
Commerce Secretary Rajesh Agrawal noted that the West Asia crisis had impacted India's exports in March, but the situation improved in April and May. Exports to West Asia nearly reached the same level as last year in May at $5.3 billion against $5.38 billion in May 2025, driven by the UAE, Saudi Arabia, Jordan, and Yemen, he said. India utilized Oman's Duqm, Sohar, and Salalah ports to push shipments to the region. Month-on-month, outbound shipments to the region rose 26.2% from $4.2 billion in April.
"Many of our problems will get alleviated if the peace deal is reached and sustainable," Agrawal said, noting that improved mobility in West Asia with likely reopening of the Strait of Hormuz will have a positive impact on India's overall trade.
Bilateral Trade Dynamics: US, China, UAE
The top export destinations for India in May were the US, UAE, Singapore, China, Netherlands, UK, Bangladesh, Tanzania, Germany, and Saudi Arabia, according to ET Retail. Major sourcing partners included China, Russia, the US, and the UAE.
| Partner | Exports (May) | Imports (May) |
|---|---|---|
| US | $8.8 billion (down 0.1%) | $5.8 billion (up 54%) |
| China | $2 billion | $12.7 billion |
ET Retail reported that India started LPG imports from the US, apart from crude oil.
Outlook and Industry Response
India's export base has expanded significantly over the past 12 years, with exports nearly doubling and services exports tripling, according to ET Retail. SC Ralhan, president of the Federation of Indian Export Organisations (FIEO), said, "The continued strong demand from both traditional and emerging markets reflects increasing global confidence in Indian products and services. The growing presence of Indian exporters in diverse geographies is helping strengthen India's position in global trade and reducing dependence on a limited number of markets."
Commerce Secretary Agrawal emphasized that improved mobility in West Asia and potential reopening of the Strait of Hormuz would further boost India's trade.
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