India's Exports Experience Growth in May 2025 Amid Narrowing Trade Deficit

In May 2025, India's exports reached $71.12 billion, marking a 2.77% increase year-on-year, despite a decline in merchandise exports. The trade deficit narrowed to $6.62 billion, while total exports for the fiscal year 2024-25 hit a record $824.9 billion. Government initiatives, including the Production Linked Incentive scheme, are contributing to this growth. Predictions suggest a 45% chance of achieving $950 billion in exports for FY 2025-26. Read on for a detailed analysis of these trends and future expectations.

By Narendra Chaudhary Jun 16, 2025, 17:07 IST

Overview of India's Export Performance

In May 2025, India's total exports, which include both merchandise and services, reached $71.12 billion, reflecting a 2.77% increase compared to the previous year, as reported by the Union Commerce Ministry. This figure is an improvement from the $69.20 billion recorded in May 2024.

Merchandise exports saw a decline, dropping from $39.59 billion to $38.73 billion, while service exports rose significantly from $29.61 billion to $32.39 billion during the same period. The total value of goods and services imported by India was $77.75 billion, a decrease from $78.55 billion in May of the previous year.

Trade Deficit and Year-to-Date Figures

The trade deficit for May 2025 decreased to $6.62 billion, down from $9.35 billion in May 2024. Cumulatively, for the fiscal year 2025-26, total exports from April to May amounted to approximately $142.43 billion, marking a 5.75% increase year-on-year. Imports during this period also rose by 6.52%, according to the latest data.

Overall imports, combining both merchandise and services, increased from $149.81 billion to $157.57 billion during April-May. The combined trade deficit for this period was recorded at $17.14 billion, compared to $15.12 billion in the same timeframe last year.

Record High Exports and Future Projections

India's total exports reached a historic peak of $824.9 billion in the recently concluded financial year 2024-25, representing a 6.01% growth from $778.1 billion in 2023-24, thus establishing a new annual record.

The exports for 2024-25 surpassed initial expectations of $800 billion, with service exports playing a crucial role in this growth, hitting a record $387.5 billion, which is a 13.6% increase from $341.1 billion the previous year.

Merchandise exports for the same fiscal year were recorded at $437.42 billion, showing a slight increase. However, the total trade deficit for 2024-25 widened to $94.26 billion, compared to $78.1 billion in the previous fiscal year.

Government Initiatives and Market Predictions

The government has implemented various measures, including the introduction of a Production Linked Incentive (PLI) scheme across multiple sectors, such as electronics, aimed at enhancing the competitiveness of Indian manufacturers, attracting investments, boosting exports, and reducing reliance on imports. These initiatives appear to be yielding positive results in terms of export growth.

In an interesting development, a prediction contract involving 27 active traders on the Probo platform, a well-known opinion trading site, currently estimates a 45% chance that India will achieve cumulative exports of $950 billion or more in the fiscal year 2025-26.