The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, JUNE 16, 2025
India’s merchandise exports dipped 2.17% year-on-year to USD 38.73 billion in May 2025, slipping back into negative territory after two months of growth. Despite the decline, the country’s trade deficit narrowed significantly to USD 21.88 billion, down from USD 22.51 billion in the same month last year and USD 26.42 billion in April.
The contraction in exports has been primarily attributed to a sharp decline in shipments of petroleum products, which plunged by 30.32% to USD 5.6 billion. Other sectors that witnessed negative growth included rice, iron ore, gems and jewellery, engineering goods, and certain textile products.
Government data released on Monday also showed that imports fell by 1.7% year-on-year to USD 60.61 billion in May, largely due to reduced inbound shipments of crude oil and gold, which declined by 26.14% and 12.6% respectively.
Cumulatively, India’s exports for April–May 2025-26 grew 3.11% to USD 77.19 billion, while imports rose 8% to USD 125.52 billion. The trade deficit for the two-month period stood at USD 48.33 billion.
Despite the modest monthly setback, Commerce Secretary Sunil Barthwal expressed optimism about the overall export performance. “Despite global policy uncertainty, ongoing geopolitical conflicts, and volatile petroleum prices, India has done extremely well on the export front,” he said. Barthwal highlighted that India is outperforming global averages and reaffirmed the ministry’s strategic focus on 20 priority countries and six key sectors.
Among the sectors that performed well in May were tea, coffee, spices, chemicals, marine products, pharmaceuticals, and ready-made garments. Notably, electronic goods exports surged by 54.1% to USD 45.7 billion, offering a silver lining amid the broader global trade slowdown.
Barthwal also acknowledged that the Iran-Israel conflict could pose further challenges to global trade. An inter-ministerial meeting involving key stakeholders is scheduled this week to assess the evolving geopolitical landscape and chart a response strategy.
On the policy front, the Commerce Ministry is actively working to finalize three critical Free Trade Agreements (FTAs) — with the UK, the European Union, and the US. Barthwal confirmed that the UK FTA is nearing conclusion and emphasized that all commerce posts in Indian Missions abroad have now been filled to provide a stronger push for international trade engagement.
