India’s trade deficit widened sharply in May 2026 despite a strong surge in exports, as rising imports outpaced gains in both merchandise and services trade, news agency ANI reported based on data released by the Ministry of Commerce and Industry.
While exports touched record levels during the month, a steep increase in imports pushed the country’s trade gap significantly higher compared to the same period last year, underlining growing domestic demand and rising commodity costs, as per the data released by the ministry.
Trade deficit jumps amid faster import growth
According to the latest estimates, India’s combined trade in goods and services expanded considerably in May 2026. Overall exports rose to USD 81.96 billion, compared to USD 70.76 billion recorded in May 2025, showing strong year-on-year growth.
However, imports grew at a faster pace, climbing to USD 92.47 billion from USD 77.55 billion a year earlier. As a result, India’s overall trade deficit widened to USD 10.51 billion, significantly higher than the USD 6.79 billion recorded during the same month last year, ANI reported.
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Merchandise exports hit all-time monthly record
One of the biggest highlights of the latest trade data was India’s merchandise export performance which rose to USD 88.91 billion during April–May 2026-27, marking a strong 16.09% growth over the corresponding period last year.
In May alone, it touched a record monthly high of USD 45.20 billion. The figure marked an 18% increase from USD 38.30 billion recorded in May 2025, showing strong overseas demand for Indian goods.
According to the news agency, the Commerce Ministry described it as a new record high monthly merchandise export performance, signalling continued momentum in India’s export sector.
For the first two months of the current fiscal year, merchandise exports stood at USD 88.91 billion during April-May 2026-27, registering 16.09% growth over the corresponding period last year.
Imports surge over 20%, widening merchandise trade gap
Despite the record export performance, imports rose even faster during the month. Merchandise imports climbed 20.62% year-on-year to USD 73.41 billion, compared to USD 60.86 billion in May last year.
This pushed India’s merchandise trade deficit to USD 28.21 billion, making goods imports the primary driver behind the widening overall trade gap.
Gold imports see sharp 60% jump
A major contributor to rising imports was gold. According to the ministry’s data, gold imports surged 60% during April-May of the current financial year, reaching USD 9.04 billion.
The sharp rise suggests higher domestic demand for the precious metal, which has traditionally remained one of India’s largest import categories.
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Services sector continues to cushion trade pressure
The services sector in India continued to provide a buffer against the widening merchandise deficit. Services exports were estimated at USD 36.76 billion in May 2026, rising from USD 32.46 billion during the same month last year.
Meanwhile, services imports also increased to USD 19.06 billion, compared to USD 16.70 billion a year ago. The sector maintained a healthy surplus, partially offsetting the pressure created by the widening goods trade imbalance.
Exports to West Asia remain stable
Commerce Secretary Rajesh Agrawal said India’s exports to West Asia remained largely stable despite global uncertainties. According to Agrawal, exports to the region stood at USD 5.30 billion in May 2026, marginally lower than the USD 5.38 billion recorded in May 2025.
TOPICSCommerce MinistryexportThis article was first uploaded on June fifteen, twenty twenty-six, at thirteen minutes past six in the evening. © IE Online Media Services (P) Ltd