Pune Media

India’s trade deficit narrows to $21.88 bn in May as non-oil exports climb, FTAs gain ground

India’s merchandise trade deficit fell to $21.88 billion in May 2025 from $26.42 billion in April, according to data released by the Commerce Ministry on Monday.

The May figure came in better than economists’ expectations of a $25 billion gap, reflecting a stronger-than-expected performance despite ongoing global uncertainties.

Imports declined 1.7% year-on-year to $60.61 billion, while exports also dipped 2.2% to $38.73 billion in the same period.

Electronic goods were the standout segment, clocking an impressive 54% year-on-year growth in May. Pharmaceuticals, marine products and labour-intensive sectors such as textiles also registered gains.

Non-petroleum merchandise exports grew 7.5% in the April-May period year-on-year, signalling resilience in core sectors outside of volatile crude markets.

However, headline exports fell from $39.59 billion in May 2024 to $38.73 billion in May 2025. Key draggers included petroleum products, gems and jewellery, and cotton yarn.

Cumulative trade up 5.75% in April-May

Despite the monthly decline, India posted a 5.75% cumulative growth in trade for April-May 2025 over the same period last year.

The Ministry highlighted increased volatility in petroleum prices due to recent geopolitical developments, which contributed to both lower export and import values in the commodity.

Also read: India, EU accelerate FTA talks amid industry opposition to carbon levy: Govt sources

Imports from Russia, Iraq and Saudi Arabia saw a year-on-year decline in April-May, while exports to the Netherlands, Singapore, the UK, Saudi Arabia and Bangladesh also moderated.

Policy push and FTA strategy

The Ministry said it was actively engaging with exporters through regular meetings with Export Promotion Councils (EPCs) and industry stakeholders including shipping lines, container associations and insurance companies to resolve operational bottlenecks.

It also underlined that all trade-related posts in Indian missions abroad have now been filled, strengthening India’s trade diplomacy.

India is currently pursuing three key Free Trade Agreements (FTAs) with the UK, EU and US—“not in the same order of importance”—and is also engaged with New Zealand, Peru and Chile to expand its trade footprint.

Preferential trade route gains momentum

The number of preferential certificates of origin—needed for exports under FTAs and PTAs—rose from 6.84 lakh in FY24 to 7.2 lakh in FY25.

In April-May alone, the certificates grew from 1.2 lakh last year to 1.32 lakh this year, showing increased utilisation of preferential trade routes.

Also Read: ANZ economist views oil price jump as a market reset, not a shock

The government said it remains focused on penetrating markets that account for 65% of India’s total imports, while concentrating export strategies on six key sectors comprising 75% of global imports.

Despite a challenging global environment and a subdued outlook from the World Trade Organization (WTO), India’s trade continues to show structural strength. Officials said the government would continue its “market-plus-sector” approach to support exporters and counter external volatility.

[ad_1]

Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.

Aggregated From –

[ad_2]

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More