Despite the ongoing geopolitical tensions in West Asia, India's merchandise trade deficit remained largely stable compared with April and narrowed marginally from a year ago, according to government data released on Monday. The merchandise trade gap stood at $28.21 billion in May 2026, compared with $28.38 billion in April. Merchandise exports rose 18% to $45.20 billion, while imports increased by 20% to $73.41 billion.
Commerce ministry said merchandise exports in May were India's highest-ever monthly outbound shipments. Official data showed that the overall trade deficit, including goods and services, widened to $10.51 billion in May 2026 from $6.79 billion in May 2025.
According to the ministry, petroleum products, engineering goods, organic and inorganic chemicals, electronic goods, and gems and jewellery were the key drivers of merchandise export growth during the month.
Petroleum products recorded one of the sharpest increases, with exports surging 54.89% from $5.44 billion in May 2025 to $8.42 billion in May 2026. Engineering goods exports grew 24.48% to $12.31 billion, while electronics exports rose 11.62% to $5.10 billion. Non-petroleum merchandise exports increased 10.49% during the period.
Imports from China climbed more 23% to $12.72 billion during May 2026 from $10.3 billion in the corresponding period last year. Exports to the country also showed a healthy 25% growth during the month. Exports to the US remained largely flat, imports from the US rose nearly 54% year-on-year in May.
Exports to the Netherlands and the United Arab Emirates (UAE) declined during the period compared with a year earlier.
Commerce Ministry officials said the conflict in West Asia had weighed on exports in March and April, but shipments to the region showed signs of recovery in May and were approaching year-ago levels.
The ministry attributed the rebound to coordinated efforts by exporters and government agencies to establish alternative trade routes and operationalise new ports in Oman.
According to officials, export growth was supported by demand from the UAE, Saudi Arabia, Jordan and Yemen. India's merchandise exports to the UAE rose 3.18% to $3.06 billion in May 2026 from $2.97 billion a year earlier, while exports to Saudi Arabia increased by more than 11%.
To facilitate trade, a logistics corridor has been developed through Omani ports, allowing cargo destined for the UAE to be offloaded in Oman and transported onward to Jebel Ali.
Officials said a significant portion of exports to the UAE is now being routed through Oman's ports of Sohar, Salalah and Duqm, helping mitigate disruptions caused by regional tensions and ensuring continuity in trade flows.
