India exports rise 18% in May 2026; deficit $28.21bn

Key headline numbers from May trade data

India’s merchandise exports rose 18% year-on-year in May to $15.20 billion, according to provisional commerce ministry data reported by PTI. Imports grew faster, rising 20.62% to $13.41 billion. This pushed the merchandise trade deficit to $18.21 billion, wider than $12.56 billion in May last year. The deficit, however, was marginally lower than $18.38 billion recorded in April. Reuters also noted that the May deficit came in below economists’ expectations of $18.72 billion.

What changed versus last year and last month

The year-on-year comparison showed a clear expansion in both flows. Exports increased from $18.30 billion in May a year earlier to $15.20 billion this May. Imports rose from $10.86 billion to $13.41 billion over the same period. On a month-on-month basis, exports improved from $13.56 billion in April to $15.20 billion in May, while imports increased from $11.94 billion in April to $13.41 billion in May. The combination kept the deficit elevated even as it eased slightly from April.

Sectors that drove the export jump

The export increase was led by petroleum products, engineering goods, and electronics, as reflected in the detailed sector data. Petroleum products were the single biggest contributor to the export surge, rising 54.89% year-on-year to $1.42 billion. Engineering goods exports stood at $12.31 billion, underlining continued strength in industrial shipments. Electronics exports were reported at $1.09 billion, aligning with the broader trend of electronics emerging as a key driver. Other export segments cited in the release included chemicals, pharmaceuticals, and gems and jewellery.

Import growth and the role of energy, gold, and electronics

Imports grew sharply in May, with petroleum, gold, and electronics mentioned among major contributors. Reuters linked the wider deficit to a rise in imports of petroleum products amid a surge in crude oil prices. Elevated energy costs can lift the overall import bill even when volumes do not rise proportionately, and the data shows imports remained high in both April and May. Gold imports also stood out in the early fiscal-year numbers, signalling continued demand.

Trade deficit: wider than last year, slightly better than April

The May merchandise trade deficit was $18.21 billion, compared with $12.56 billion in May last year. At the same time, it was slightly lower than April’s $18.38 billion, as record-high exports helped offset some of the pressure from imports. Reuters described the deficit as “slightly decreased” from April, reflecting the modest month-on-month improvement. The print was also below the Reuters survey expectation of $18.72 billion, suggesting the outcome was somewhat better than what markets were braced for.

April-May FY27: early momentum in exports

Cumulative merchandise exports during April-May 2026-27 rose to $18.91 billion, up 16.09% from the corresponding period last year, as per government data. Reuters separately reported that during the April-May period of FY27, India’s total exports including merchandise and services reached $162.69 billion, registering 14.66% growth compared with the same period last year. Taken together, these numbers point to a firm start to the fiscal year on the trade front, even as imports remain elevated.

West Asia shipments: stability despite geopolitical developments

Commerce Secretary Rajesh Agrawal said exports to West Asia remained largely stable despite geopolitical developments in the region. India’s exports to the Middle East were $1.30 billion in May, compared with $1.38 billion in May 2025, he said. The near-flat change is notable given the ongoing disruptions and uncertainty cited by Reuters around energy prices and the Middle East. The data point also helps explain why the overall export performance was driven more by product categories than by a single region.

Gold imports surge early in the fiscal year

Gold imports during the first two months of the current fiscal year surged 60% to $1.04 billion, according to the data. While the May import basket was influenced by petroleum, gold, and electronics, the April-May gold number highlights that the pressure from non-oil imports can also be meaningful. This matters for the trade balance because gold is a large-value import item and can materially affect the deficit during periods of strong demand.

Market and policy relevance: what the numbers signal

For investors and businesses tracking macro signals, the May data reinforces two parallel trends: export momentum has improved, but the import bill is rising fast. The combination keeps the trade deficit near the $18 billion mark, which was also the case in April. Reuters noted India’s efforts to seek enhanced access to the US market alongside trade discussions, a reminder that trade performance is closely tied to global demand and policy outcomes. Any sustained move in crude oil prices can quickly feed into import costs and the deficit, as reflected in the May narrative around petroleum-related imports.

Summary table: May trade snapshot

Sector-wise exports cited for May

Conclusion: strong exports, high imports keep deficit elevated

May’s trade numbers show an export jump to $15.20 billion alongside a sharp rise in imports to $13.41 billion, leaving a deficit of $18.21 billion. Early FY27 momentum is visible in the $18.91 billion April-May merchandise export total and in the $162.69 billion total exports number that includes services. Commerce Secretary Rajesh Agrawal said current trends point to a positive year for exports, while also flagging that West Asia shipments stayed largely stable. The next focus for markets will remain how energy prices and key import categories such as gold influence the import bill as the fiscal year progresses.