India’s trade performance in May 2025 has shown strength and stability despite uncertain global conditions, according to views shared by industry experts and economists. FIEO President S C Ralhan highlighted that India’s total exports, including goods and services, increased by 2.8 per cent to USD 71.12 billion in May 2025, up from USD 69.20 billion in May 2024. The growth was mainly driven by services such as software, consultancy, and financial services.
Even though merchandise exports dipped slightly to USD 38.73 billion, the continued service momentum helped support overall performance.”Exporters are adapting well to a tough global environment,” said Ralhan. “The ability to sustain export growth despite logistical disruptions, especially in the Middle East, is a testament to the sector’s agility and policy support. “On the import front, merchandise imports eased to USD 60.61 billion, while overall imports (goods and services) stood at USD 77.75 billion, down from USD 78.55 billion in May 2024.
He added, “With appropriate policy interventions and global conditions expected to stabilise in the second half of 2025, India is well-positioned to regain a strong export growth trajectory”. Pankaj Chadha, Chairman of EEPC India, stated that the engineering exports sector has managed to stay steady despite continued international challenges.
While there was a minor decline of 0.8 per cent in engineering goods exports in May 2025, down to USD 9.89 billion from USD 9.97 billion in the same month last year, the overall numbers remain encouraging. He said, “Overall global situation, however, remains volatile. Uncertainty has only been mounting due to geopolitical tensions in key parts of the world.
The latest Israel-Iran conflict threatens to multiply the challenges for the exporting community. Apart from a rise in input costs as a result of a jump in crude prices, there is heightened concern around the blocking of the Straits of Hormuz by Iran in case tensions further intensify.
Aditi Nayar, Chief Economist at ICRA, noted that India’s merchandise trade deficit reduced significantly to USD 21.9 billion in May 2025 from USD 26.4 billion in April. This is expected to help contain the current account deficit (CAD) for Q1 FY2026 to around USD 13 billion, or 1.3 per cent of GDP.
She said, “If crude oil prices average around USD 75/barrel over the remainder of this fiscal, we foresee the CAD at 1.2-1.3 per cent of GDP for FY2026. While India’s exports contracted slightly in May 2025, this was entirely led by oil exports. Non-oil exports posted a YoY growth for the second consecutive month, led by electronic goods, garments, organic and inorganic chemicals, and marine products, which helped to moderate the trade deficit. Further, the YoY contraction in oil and gold imports helped to contain the merchandise trade deficit”. (ANI)
