India's merchandise trade deficit reached $28.21 billion in May 2026, according to a report by Dolat Capital cited by ANI. The report suggests that lower crude oil prices and higher duties on gold imports are likely to ease pressure on the import bill in the coming months.
Petroleum Imports Surge
Petroleum imports surged to $22.7 billion in May 2026, up from $14 billion a year earlier. Non-petroleum exports rose to $70.7 billion during April-May FY27, compared to $64 billion in the same period last year. Non-petroleum, non-gems and jewellery exports also increased to $65.9 billion from $59.2 billion.
Non-Petroleum Imports Remain Strong
India's non-petroleum imports remained robust at $104.1 billion, up from $90.8 billion a year ago, driven by demand for electronics, machinery, capital goods and industrial inputs. This reflects continued momentum in domestic investment and consumption.
Export Growth Broad-Based
Dolat Capital noted that merchandise imports surged to $73.41 billion (+20.62% YoY) in May 2026, cumulatively reaching $145.35 billion (+15.14% YoY) for April-May. Exports grew to $45.20 billion (+18.00% YoY) in May, with a cumulative total of $88.91 billion (+16.09% YoY) for the two-month period.
The report emphasized that export growth is becoming increasingly broad-based across products and geographies, reducing dependence on a limited set of commodity segments. Stronger trade engagement with Asia, the Middle East, Africa and other emerging markets is helping diversify geopolitical risks and improve resilience against regional disruptions.
Future Outlook
Looking ahead, the report stated, "Softer crude oil prices amid easing geopolitical tensions in West Asia could lower the oil import bill and help narrow the trade deficit." It further noted that petroleum product exports are likely to benefit from a favorable excise duty structure and pent-up demand, while higher duties on gold imports could curb non-essential imports.
"Together, these factors support a more balanced and resilient external sector outlook, with trade increasingly anchored by manufacturing competitiveness, investment demand and diversified global partnerships," the report added.
