India’s trade landscape in May 2025 reflected notable stability and adaptability, even as international markets remained uncertain. Economic analysts and trade bodies observed a measured yet meaningful uptick in total exports, pointing to the country’s resilience under challenging global conditions.
According to the Federation of Indian Export Organizations (FIEO), India’s overall exports—including both goods and services—rose to $71.12 million in May 2025, marking a 2.8% increase from $69.20 million in the same month last year. This growth was primarily propelled by robust service sector performance, particularly in software, consulting, and financial services.
Merchandise exports saw a slight dip, landing at $38.73 million, but the strength of service-related trade effectively offset this decline. FIEO President S C Ralhan emphasized that Indian exporters have shown agility and resilience, especially in navigating logistical hurdles emerging from tensions in the Middle East.
On the import front, merchandise imports dropped to $60.61 million, contributing to a total import figure of $77.75 million for May—slightly lower than $78.55 million from May 2024. This slight contraction in imports helped India contain its trade imbalance.
Engineering exports, a key segment of India’s manufacturing base, managed to maintain relative stability. Despite a minor 0.8% dip—down to $9.89 million from $9.97 million last year—Pankaj Chadha, Chairman of EEPC India, noted the performance remained positive considering ongoing geopolitical friction. He pointed out that the Israel-Iran conflict could pose further risks, particularly through rising crude prices and potential disruptions in the Strait of Hormuz.
Aditi Nayar, Chief Economist at ICRA, highlighted a significant improvement in India’s merchandise trade deficit, which narrowed to $21.9 billion in May from $26.4 billion in April. She estimated India’s current account deficit (CAD) for Q1 FY2026 may settle around $13 billion, or 1.3% of the GDP. If oil prices remain near $75 per barrel, the full-year CAD could remain between 1.2% and 1.3% of GDP.
Nayar added that while oil exports declined, non-oil categories such as electronics, chemicals, garments, and seafood showed strong performance, helping moderate the overall trade deficit and offering optimism for the months ahead.
