India's goods trade deficit narrows to $21.88 billion in May from year ago
New Delhi: India's merchandise trade deficit narrowed to $21.88 billion in May, data from the ministry of commerce and industry showed on Monday.
Merchandise exports fell to $38.73 billion in May from $39.59 billion in the year-ago period. Goods imports declined to $60.61 billion last month from $61.68 billion a year ago.
In April, the merchandise trade deficit rose to a five-month high of $26.42 billion on the back of higher imports, even as exports increased.
After Trump's tariffs and the India-Pakistan conflict, traders now face the challenge of escalating tensions in West Asia after Israel attacked Iran on 13 June.
The armed conflict between Iran and Israel has escalated concerns over the safety of cargo passing through the Strait of Hormuz and the Red Sea, a critical maritime corridor for Indian exports. Over two-thirds of India's oil imports and almost half of its liquefied natural gas imports transit through the Strait of Hormuz.
The Israel-Iran attacks have increased shipment costs by up to 50% and threaten to disrupt trade routes across West Asia. Exporters and trade bodies have already flagged shipping delays, rising freight charges, and limited insurance coverage, officials said.
The latest conflict comes amid global trade tensions triggered after US President Donald Trump briefly imposed reciprocal tariffs on imports from key partners, including India, before pausing them to allow space for negotiations. The Trump administration has also levied a 10% universal tariff on all imports from every country.
India and the US are working out a limited trade deal to ease market access and tariff barriers—a modest but crucial step as India's import bill continues to rise.
In addition, the recent India-Pakistan conflict strained regional trade dynamics. Heightened tensions have halted formal exchanges, affecting border economies and informal trade channels. The instability also deters investor confidence in the region, compounding challenges for India's trade outlook amid already rising import bills and global tariff uncertainties.
Services exports rose to $32.39 billion in May, from $29.61 billion in the same period of the previous year. Services imports stood at $17.14 billion, compared with $16.88 billion a year earlier.
The combined value of merchandise and services exports touched $71.12 billion in May, up from $69.20 billion a year ago.
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