India's trade deficit widens in May on rising imports

India's trade deficit expanded in May 2026, driven by a sharper increase in imports that outpaced export growth. The overall trade deficit widened to $10.51 billion from $6.79 billion in May 2025, according to estimated data from the Ministry of Commerce and Industry.

Both merchandise and services trade saw year-on-year expansion. Merchandise exports reached a new record of $45.20 billion in May 2026, up from $38.30 billion the previous year. However, merchandise imports also saw a significant jump, rising to $73.41 billion from $60.86 billion.

Services trade also demonstrated strength, with exports increasing to $36.76 billion and imports to $19.06 billion. While the surplus in services trade helped cushion the impact of the merchandise deficit, it was not enough to prevent the overall trade gap from widening. The trend suggests robust external demand for Indian goods and services, alongside stronger domestic demand and elevated commodity prices reflected in higher import bills.