India Records Highest Ever Merchandise Exports of $45.20 Billion in May
India reached a record $45.20 billion in merchandise exports in May 2026, bolstered by petroleum and engineering goods. Despite the achievement, the trade deficit widened to $28.2 billion due to increased oil and gold imports, with economists anticipating a more stable outlook ahead.
Highlights
- •India's merchandise exports touched a record high of $45.20 billion in May 2026.
- •Imports surged to a seven-month high of $73.41 billion, largely due to rising crude oil costs.
- •The merchandise trade deficit widened to $28.2 billion, up from $22.5 billion in May 2025.
- •Engineering and petroleum sectors acted as the primary drivers for export growth during the month.
India achieved a historic milestone in its external trade sector as merchandise exports climbed to a record-breaking $45.20 billion during the month of May 2026. This significant performance was largely propelled by robust growth in the shipments of petroleum and engineering products, alongside a notable recovery in trade volumes directed toward West Asia.
According to the latest trade data, the country's total merchandise exports saw an 18 percent increase, rising from $38.30 billion in May 2025 to the current high of $45.20 billion. Conversely, merchandise imports also experienced a sharp upward trajectory, reaching a seven-month peak of $73.41 billion, which represents a 20 percent surge compared to the $60.86 billion recorded in the same month of the previous year. This rise in imports was primarily attributed to higher spending on crude oil.
Drivers of Trade Growth and Deficit Analysis
The energy sector played a pivotal role in these figures, with petroleum exports soaring by nearly 55 percent to reach $8.421 billion. Meanwhile, the import bill for crude and related petroleum products climbed to $22.677 billion, up from $14.745 billion a year ago. In the engineering sector, exports reached $12.311 billion, reflecting a healthy growth rate of 24.48 percent. Furthermore, the electronics industry showed dynamic activity, with exports valued at $5.097 billion, while electronics imports rose significantly to $12.315 billion.
Other notable trends included a 34 percent increase in gold imports, reaching $3.416 billion, though silver imports faced a sharp decline of 86 percent. Regarding trade partners, exports to Singapore and China demonstrated impressive growth of 68.9 percent and 24.80 percent, respectively. While trade with the United States remained relatively stable, shipments to Tanzania, Sri Lanka, and South Africa saw strong gains.
Reflecting on the wider economic implications, Rahul Agrawal, Principal Economist at ICRA, noted that the trade deficit widened to $28.2 billion in May 2026, compared to $22.5 billion in the previous year, driven largely by higher net oil imports and gold pricing. However, he expressed a positive outlook, suggesting that the easing of geopolitical tensions in West Asia could help cool commodity prices. Consequently, expectations for the Current Account Deficit (CAD) in fiscal year 2027 have been revised to a more favorable position than previously estimated. The services sector also maintained positive momentum, with exports reaching $36.76 billion against imports of $19.06 billion.
