New Delhi: India’s goods exports rose 9.1% to a three-month high of $38.1 billion in May, outpacing imports that grew 7.7% on a higher base to $61.9 billion. The trade deficit zoomed to a seven-month high of $23.8 billion.The rise in exports was led by engineering goods, electronics, drugs, pharma products and plastics, official data showed Friday.Terming May as an “excellent” month for exports, commerce secretary Sunil Barthwal said that the situation was looking more optimistic for trade this year, with even sectors such as textiles recording healthy growth after months of sluggishness.Easing inflation in developed economies is expected to lift demand and exports, he said. “We hope this trend continues this year… Also hope that there are no more geopolitical conflicts and disruptions in major global shipping routes,” Barthwal said. “This will be a positive trend for Indian exports this fiscal year.”The trade deficit was $19.1 billion in April and $22.5 billion in May 2023. The previous high in the trade gap was in October 2023 at $31.46 billion.“Trade deficit per se I do not consider it as bad as long as you have FDI (foreign direct investment) flowing in, foreign exchange coming in and if you are balancing it through other means,” Barthwal said, pointing to growing services exports. “Then we should not unnecessarily be worried about the trade deficit in merchandise.”Exports rose 9% month-onmonth from April.The top export destinations were the US and the UAE whereas China and Russia were the biggest import sources.As per data released by the commerce and industry ministry, 20 of the key 30 export sectors reported growth while 16 imports expanded.Gold imports shrank 9.7% on-year in May to $3.33 billion, hit by record high prices. “In sequential terms, 71% of the enlargement in the merchandise trade deficit in May relative to April 2024 was driven by the net oil balance, with a sharp rise in volumes amidst some cooling in prices,” said ICRA chief economist Aditi Nayar.Outbound shipments of petroleum products rose 15.75%, engineering goods 7.39% and electronic goods 22.97% but spices, gems and jewellery and marine products exports declined in May.“The upturn in shipments reflects improvement in demand scenario in India’s key markets. The global economic outlook is expected to improve in the ongoing fiscal and exporting community remains optimistic,” said Engineering Exports Promotion Council of India chairman Arun Kumar Garodia.Softening price pressure, easing interest rates in major advanced economies, and trade pacts are expected to spur demand.
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