India?s trade deficit widens in May 2026 despite record merchandise exports

India?s trade deficit widened to USD 10.51 billion in May 2026, compared to USD 6.79 billion in May 2025, as imports grew faster than exports, according to estimated trade data released by the Ministry of Commerce and Industry.

Overall trade, including merchandise and services, recorded strong growth during the month. Total exports rose to USD 81.96 billion in May 2026 from USD 70.76 billion a year earlier. However, imports increased at a faster pace, reaching USD 92.47 billion compared to USD 77.55 billion in May 2025, leading to a wider trade gap.

Merchandise exports touched a record monthly high of USD 45.20 billion in May 2026, up from USD 38.30 billion in the same month last year. The ministry highlighted this as a new record high for monthly merchandise exports.

At the same time, merchandise imports rose sharply to USD 73.41 billion from USD 60.86 billion in May 2025. The higher import bill continued to be the main factor behind the widening trade deficit.

Services trade also remained strong. Services exports increased to an estimated USD 36.76 billion in May 2026 from USD 32.46 billion a year ago, while services imports rose to USD 19.06 billion from USD 16.70 billion.

The services sector continued to generate a surplus, helping offset part of the merchandise trade deficit. However, the surplus was not enough to prevent the overall trade gap from widening.

The data indicates strong global demand for Indian goods and services, with merchandise exports reaching a record level. At the same time, higher imports point to robust domestic demand and elevated commodity prices. The widening trade deficit will remain an important indicator to watch in the coming months, even as export performance continues to support India?s external sector.

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