India Exports Grow 9.1% in May 2024, Trade Deficit Hits 7-Month High

India’s Merchandise Exports Rise 9.1% in May 2024 to $38.13 Billion; Trade Deficit Widens

India’s merchandise exports increased by 9.1% year-on-year in May 2024, reaching $38.13 billion, supported by strong performance in engineering goods, petroleum products, electronics, pharmaceuticals, and textiles. The growth reflects a revival in global demand, according to government data released on Friday.

Imports Increase, Trade Deficit Widens

Imports in May 2024 rose by 7.7% to $61.91 billion, driven by higher shipments of petroleum, transport equipment, silver, and vegetable oil. As a result, the trade deficit widened to $23.78 billion, the highest level in seven months.

Positive Economic Outlook

Commerce Secretary Sunil Barthwal noted that easing inflation in advanced economies has improved consumer purchasing power, leading to stronger demand. He expressed confidence that the export growth trend is likely to continue.

Exporters also remain optimistic, citing rising global order bookings and expectations of stronger trade growth in 2024, as projected by the WTO, IMF, and OECD. In 2023, global trade had slowed due to high inflation, rising interest rates, and weak demand conditions.

FIEO President Ashwani Kumar said that improved demand from the European Union, the UK, West Asia, and the United States is expected to support export growth. He added that a more than 10% rise in order bookings signals recovery in labor-intensive export sectors.

Strong Start to FY25

India’s exports had declined by 3.1% to $437 billion in 2023–24. However, FY25 began on a positive note, with exports rising in both April and May 2024. Total exports for April–May increased by 5.1% to $73.12 billion. During the same period, imports rose by 8.89% to $116.01 billion, resulting in a trade deficit of $42.89 billion compared to $36.97 billion in the previous year.

Sectoral Declines

Some sectors recorded declines in May 2024, including gems and jewellery, marine products, iron ore, cashew, and oil meals. Notably, spice exports fell by 20% to $361.17 million, following recalls of certain Indian spice products in markets such as Hong Kong and Singapore.

Key Export Destinations

The top export destinations showing strong year-on-year growth in May 2024 were Malaysia (86.95%), the Netherlands (43.92%), the United Kingdom (33.54%), the United Arab Emirates (19.43%), and the United States (13.06%).

Major Import Sources

The leading sources of import growth included Angola (1274.95%), Iraq (58.68%), the UAE (49.93%), Indonesia (23.36%), and Russia (18.02%).

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