New Delhi. India’s merchandise exports in May rose nine percent to $38.13 billion, from $34.95 billion in the same month a year ago. During this period, the trade deficit widened to a seven-month high of US$23.78 billion. According to government data released on Friday, India registered a rise in exports in May despite global economic uncertainties on the back of healthy growth in sectors such as engineering, electronics, pharmaceuticals, textiles and plastics.
Due to increase in crude oil imports during the period under review, the country’s total imports increased by 7.7 percent to US $ 61.91 billion. It was US $ 57.48 billion in May 2023. Oil imports increased by 28 percent to $ 20 billion in May. Thus, oil imports increased by 24.4 percent to $ 36.4 billion in the first two months of the financial year 2024-25. However, gold imports declined marginally to $ 3.33 billion in May this year from $ 3.69 billion in the same month last year.
In the month under review, the country’s trade deficit, i.e. the difference between imports and exports, increased to US $ 23.78 billion, which is the highest level in seven months. Last time it was US $ 31.46 billion in October 2023. In April 2024, the country’s exports declined to US $ 41.68 billion, which was $ 41.96 billion in April 2023. Overall, during April-May in the current financial year, exports grew by 5.1 percent to $ 73.12 billion while imports grew by 8.89 percent to $ 116 billion.
Commerce Secretary Sunil Barthwal said about these figures that the month of May has been excellent from the export point of view and this trend is expected to continue. He said that inflation is slowing down in advanced economies and this will help in increasing the purchasing power, which will increase the demand for imports.
Barthwal said, “I think this positive trend will continue. Things are looking better and optimistic for the trade sector.” On being asked about the concern over the growing trade deficit, the secretary said that since India is registering higher economic growth than the world, the domestic demand for imports will increase and the exportable surplus will decrease.
Barthwal said, “As long as foreign direct investment (FDI) is coming, foreign currency is coming and you are balancing it in other ways, I don’t consider the trade deficit that bad. Secondly, we should also focus on increasing service exports… then we should not be unnecessarily worried about the trade deficit of goods.” According to data released by the Commerce Ministry on Wednesday, the estimated value of services exports in May is $30.16 billion as against $26.99 billion in May 2023. Imports of services are also estimated to increase to $17.28 billion this month from $15.88 billion in May 2023. India’s top five export destinations in May were the US, Netherlands, UAE, Malaysia and the UK.